Stocks Stage A Dizzying Rebound; Dow Average Soars 111 Points, Erasing Much of Friday's Loss
The stock market left investors dizzy with relief and motion sickness today as the Dow Jones industrial average soared 110.55 points, recovering two-thirds of its loss Friday.</br></br>"This is a bungee jumping market," said Robert H. Stovall, president of Stovall/Twenty-First Advisers Inc.</br></br>Analysts trying to explain the sharp turnaround said Friday's 171-point plunge by the Dow resulted from misplaced panic by bond traders and hedge fund managers when the government reported an unexpected increase in jobs nationwide in February. The report was taken as a sign the economy was overheating, and bond prices fell sharply, with stocks following.</br></br>By today, the analysts said, most investors had concluded the report gave a distorted view of the economy, particularly the inflation outlook, and stock and bond prices rebounded. The benchmark 30-year Treasury bond rose 1-1/16 points, and its yield fell to 6.62 percent from 6.72 percent late Friday.</br></br>The Dow, which fell 3 percent Friday, was up 2 percent today, closing at 5581.00, just 61 points below the high it set last Tuesday. Other indicators also were higher, and 1,568 stocks rose while 879 declined.