NEW YORK: Stocks closed with mild losses Thursday as speculation of a breakthrough in Europe’s efforts to resolve its debt crisis fueled a late-session recovery.
“With the market looking out of control on the downside, there were rumors of some sort of a breakthrough in Europe. Nothing you could put your finger on,” but that’s when the turnaround came, said Peter Tuz, portfolio manager at Chase Investment Counsel in Charlottesville, Va.
After falling 177 points, the Dow Jones industrial average ended down 24.75 points, or 0.2 percent, to 12,602.26, with JPMorgan Chase & Co. off 2.5 percent on a New York Times report that its trading losses could top $9 billion.
The S&P 500 shed 2.81 points, or 0.2 percent, to 1,329.04. The Nasdaq composite fell 25.83 points, or 0.9 percent, to 2,849.49.
In Brussels, European leaders gathered for another summit; in the United States, the Supreme Court upheld the Affordable Care Act of 2010.
“Does Europe need a Lehman-like moment to turbocharge the leaders into effecting decisions? Right now they almost have this agnostic attitude toward the markets. That could change very quickly,” said Hank Smith, chief investment officer at Haverford Investments.
He recalls the first U.S. congressional vote on the Troubled Asset Relief Program, when “our markets sold off 800 points, saying, ‘Ladies and gentlemen, let’s come back to the table and have another vote.’ ’’
“Bond vigilantes — everyone wants to know what happened to them. Well, they are in Europe, camped out in Spain and Italy,” said Smith, referring to the escalating borrowing costs illustrated in the yields of both countries.
In Thursday trading, Tenet Healthcare Corp. rose, as did shares of other hospitals and Medicaid insurers, while commercial health plans such as WellPoint Inc. declined after the Supreme Court upheld most of President Barack Obama’s health-care legislation.
“It’s clearly a surprise. This is not having an effect on overall stocks, but [there is] clear celebration by hospitals, because they will benefit from more traffic,” said Art Hogan, managing director at Lazard Capital Markets in New York.