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Ending Another Dramatic Day, Dow Closes Sharply Higher

Update at 4:18 p.m. ET. Another wild day is over on Wall Street, but unlike yesterday, today's market ended on a positive note: The Dow closed more than 400 points up.

Both Nasdaq and the S&P were up 4.6 percent.

The New York Times reports that the wild swing into positive territory as because of "bargain-hunting investors, positive economic data and some easing of concerns over Europe's finances."

So just how volatile has the market been this past week? Today Dow broke a record: The The Wall Street Journal reports, that for the first time in history the Dow has seen "a net change of 400 points or greater for four consecutive days."

The Journal adds:

  • This is the fourth straight day of 3.5% + moves --- the last time this occurred was the four day ended November 24, 2008
  • The DJIA has now had six straight day of 400+ point high/low swings. The last time this occurred was during the six-day ended October 29, 2008.
  • Update at 2:13 p.m. ET. Treasury Bond Auction:

    Because of the positive job report, 30-year U.S. Treasuries drew the lowest level of demand since February 2009, reports Bloomberg. They add:

    Today's auction produced a yield of 3.750 percent, compared with the average forecast of 3.622 percent in a Bloomberg News survey of eight primary dealers.

    "People didn't show up for this one," said Scott Sherman, an interest-rate strategist in New York at Credit Suisse Group AG, one of the 20 primary dealers that are obligated to participate in U.S. auctions. "Increased worry about inflation has to get priced in to the long bond given the Fed's accommodative stance. For now, there will be apprehension to buy that far out on the curve at these yield levels."

    Update at 2:10 p.m. ET. Dow Surges:

    The Dow has been testing session highs in the past hour. At one point, the Dow was up 369 points or 3.4 percent. Here's CNN Money on where the optimism is coming from:

    The optimism was driven by a labor market report showing jobless claims fell to a 4-month low, and by Cisco Systems' better-than-expected guidance for the current quarter. Shares of Cisco jumped more than 16%, making the stock a top performer in all three major indexes.

    Update at 11:57 a.m. ET. Prices On Long-Term Treasuries Fall:

    Reuters just moved this piece of news:

    U.S. 30-year Treasuries fell 2 points in price on Thursday, extending earlier losses ahead of a $16 billion auction of long bonds at 1 p.m.

    The Wall Street Journal had an interesting piece, yesterday, looking forward to today's auction. In short, it said the yield spread between 2-year notes and 10-year notes was tightening. Yesterday, it was at 1.91 percent, "the lowest level in more than two years, down from 2.59 percentage points late July."

    And that, the Journal says, is not a good indicator for the economy:

    Typically when investors are optimistic about the economy, they demand higher yields on long-dated maturities to hedge against inflation as the curve steepens. That was the case in February, when the two-year and 10-year yield spread traded at a historic wide of 2.89 percentage points as inflation fears gripped the market.

    Yet when worries about the economy rise and inflation fears take a back seat, investors demand a lower yield premium to hold long-dated bonds, thus flattening the curve.

    Update at 11:34 a.m. ET. Stocks Are Rising:

    At this hour, the markets seem to have stabilized and they've been steadily rising. The Dow is up 2.43 percent; Nasdaq is up 3.03 percent and the S&P is up 2.74 percent.

    Update at 10:09 a.m. ET. 400 Point Days:

    The AP provides a little bit of context on 400 point swings:

    The Dow has moved more than 400 points every day this week, the first time it has done that three days in a row since 2008. It fell more almost 520 points on Wednesday.

    2008 was, of course, the year the markets collapsed because of the financial crisis.

    Our Original Post:

    At opening the markets dipped, then regained their steam on the good news we reported earlier about lower unemployment claims. Then, the stocks headed lower. All of that to say, it looks like it's going to be another dramatic day on Wall Street.

    The European markets still dealing with fears about France's credit rating could give us some indication of the type of up-and-down day we may be in for. Here's Dow Jones Newswires with what happened there:

    European markets turned mostly lower as concerns again swirled about the fate of France's triple-A rating and the health of that country's banks. The Stoxx Europe 600 dropped 1.2% after being up 2.3% earlier in the session. Asian bourses were mixed, with China's Shanghai Composite rising 1.3% but Japan's Nikkei 225 shedding 0.6%.

    We will keep an eye on the markets throughout the day.

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