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Shaky stock market bounces back [Pittsburgh Post-Gazette](Pittsburgh Post-Gazette (PA) Via Acquire Media NewsEdge) Sept. 27--Wall Street's seesaw week ended on an upbeat note Friday, as an upward revision in second-quarter economic growth and improving consumer sentiment sent major stock indexes up about 1 percent. The rise erased much of the previous day's reverse. The S&P 500 advanced 16.86 to finish at 1,982.85, leaving it up 7.3 percent for the year. The Dow Jones industrial average closed at 17,113.15, up 167.35 for the day and 3.2 percent for the year. The Nasdaq bounced back 45.45 to finish at 4,512.19, leaving it up 8 percent for the year. The Post-Gazette/Bloomberg Index rose 0.74 percent, with 46 of the 56 stocks in the index advancing. The biggest gainers were nonprofit educator Education Management Corp., up 6 cents to $1.10; aluminum producer Alcoa, up 56 cents to $16.19; and network equipment company Black Box, which finished at $23.91, up 71 cents. The strong close capped one of Wall Street's most volatile weeks this year. The S&P 500, a broad measure of the market's health, has hit a new high an average of once a week since the end of March, said Geoffrey Gerber of Twin Capital Management in McMurray. "That's a significant period for you to have a new high once a week with very little volatility," he said. Most days this year swings in the S&P 500 have been less than 1 percent, Mr. Gerber said. That included a period of 62 trading days from mid-April until mid-July when the daily fluctuation in the index was less than 1 percent. Mr. Gerber attributed the recent volatility to the fact that some cracks are showing up in what has been a broad market advance. Small cap stocks have suffered setbacks of late, as have energy stocks, he said. Daniel Henderson of CooksonPeirce, a Downtown investment manager, said low trading volume has contributed to the volatility. Mr. Henderson said some attributed Thursday's selloff to managers of hedge funds that invested in high-yield bonds and had to sell shares from their portfolios. Their activity sent the market low enough to trigger program selling by other investors, which accelerated the slide, he said. "It's a good opportunity to put more cash back in the market," Mr. Henderson said. He believes the bull market, already more than 5 and a half years old, has a ways to go. But the fact that the market rally has yet to include a major correction is on the mind of Chris Wiles of Rockhaven Capital Management in Mt. Lebanon. He said there have only been three other periods where the market went this long without a correction of at least 10 percent. They included the three years prior to the October 1987 crash and the period before the onset of the latest recession. "That doesn't mean it's going to happen tomorrow," Mr. Wiles said. "It means there's more downside risk than upside return." Third-quarter earnings season and the strength of the economy will be two indicators of where the market goes from here. "The [U.S.] economy is perfect right now. It's Goldilocks -- not too hot and not too cold," Mr. Henderson said. Mr. Wiles is watching how the economies in Europe, which could be sliding back into a recession, and China, which is experiencing slower growth, impact the earnings of U.S. companies that rely on those markets. "The U.S. economy may be doing OK, but we still have a lot of companies that need the rest of the world for part of their growth," Mr. Wiles said. Len Boselovic: 412-263-1941 or [email protected] ___ (c)2014 the Pittsburgh Post-Gazette Visit the Pittsburgh Post-Gazette at www.post-gazette.com Distributed by MCT Information Services |