Wall Street bounces back

September 6, 2008

Wall Street shares recovered from steep early losses and ended mainly higher overnight after a jump in US unemployment prompted renewed talk of recession in the world's biggest economy.

Some analysts said the market had anticipated the weak labour report and had priced this in with yesterday's hefty decline, setting the stage for investors to scoop up beaten-down shares.

The Dow Jones Industrial Average of blue chips bounced back from an early slide of nearly 150 points to rise 32.41 points (0.29 per cent) to 11,220.64 at the closing bell.

The tech-heavy Nasdaq composite recouped most of its hefty losses of about 1.9%, ending with a modest decline of 3.16 points (0.14 per cent) at 2255.88.

The broad-market Standard & Poor's 500 index rose 5.42 points (0.44%) to a preliminary close of 1242.25.

Market action came as the Labour Department said the US unemployment rate jumped to a five-year high of 6.1% as
84,000 jobs were slashed in August.

The report - considered one of the best indicators of economic momentum - marked the eighth consecutive month of shrinking payrolls, and was worse than expected by private economists, sparking fresh worries about recession.

Analysts at Briefing.com said the Wall Street action showed "an impressive turn in sentiment'' despite the bleak data.

"The tone through midday had been largely pessimistic, but buyers emerged as stocks posted limited losses in the face of disappointing economic data and continued threats of a global slowdown,'' the analysts said.

AFP