Market wavers, closes on gain

Associated Press

December 3, 2008

NEW YORK - In a session that showed more indecision than conviction, the stock market rebounded yesterday from the previous day's steep decline. The Dow Jones industrials rose 270 points after fluctuating sharply, and all the major indexes rose more than 3 percent.

Investors wary about the economy drew solace from Ford Motor Co. Chief Executive Alan Mulally, who said the automaker has enough cash to make it through 2009 and might not need government help. Rival General Motors Corp. said late in the day that it needs $12 billion in government loans to continue operating; the news briefly shook the market, but stocks rebounded before the close.

The market was also encouraged after General Electric Co. said it expects to pay a dividend despite projections that fourth-quarter results will near the low end of its previous forecast. That raised some hopes that U.S. companies might fare better during the recession than the market has feared.

Investors got an added lift when the Federal Reserve said it will extend key programs aimed at loosening the credit markets and restoring stability to the financial sector. That helped make financial stocks, the hardest-hit sector since the credit crisis began, among the market's biggest gainers.

Still, the day's news wasn't enough to completely calm investors, who are weary after huge swings in the market - including the nearly 680-point slide in the Dow on Monday. The blue chips were up more than 260 points during the afternoon yesterday, then dipped to a loss before swinging higher. Analysts said the volatility underscores how bear markets operate and warned that this pattern isn't expected to change anytime soon.

"I don't know where the bottom to all this is," said Alexander Paris, economist and market analyst for Chicago-based Barrington Research. "In these kind of markets, all you have to do is get enough confidence to hold your nose and ignore the bad news to send the market higher."