Stocks Close Higher after Turbulent Session
NEW YORK (AP) -- Stocks ended a volatile session mostly higher Tuesday as investors rewarded companies that released strong earnings reports for the final quarter of 1999. Market averages fluctuated as the threat of rising interest rates convinced many investors that corporate profits may be pinched later this year.
The Dow Jones Industrial Average rose 21.72 to close at 11,029.89. The blue-chip index dropped as much as 124.72 points earlier in the session and appeared headed for its sixth consecutive decline before turning higher.
Broader stock indicators also bounced back from major losses to finish higher. The Standard & Poor's 500 rose 8.50 to 1,410.03, and the Nasdaq Composite index gained 71.33 to 4,167.41.
Investors struggled to chart a course Tuesday as the latest reports of robust corporate profits were nearly overshadowed by growing worries that rising interest rates will make it difficult for companies to repeat their solid performances.
Higher interest rates can cut into corporate profits as it becomes more expensive to borrow money.
Next week, the Federal Reserve is expected to raise interest rates a quarter-percentage point in its latest move to slow the economy's growth and head off inflation. A growing number of economists fear that an increase next week will be only the first of several this year.
`'The market is volatile because investors have a lot of questions," said Alan Skrainka, chief market strategist at Edward Jones in St. Louis. "They're wondering how aggressively the Fed will raise rates and whether the high valuation of stocks is justified, especially if rates are going higher."
Many high-priced technology stocks tumbled Tuesday. Those companies are viewed as especially vulnerable to rising interest rates because they attract investors by promising strong earnings growth in the future. …