Stocks Close Higher, Tech Shares Lift Nasdaq

Investors' faith in technology seemed to rise, along with shares of Google, Yahoo, and Microsoft.

K.C. Jones

October 16, 2008

2 Min Read
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The markets closed up 4.68% Thursday, after yet another triple-digit point swing in a single session.

The good news came after another heavy day of trading full of sharp rises and steep dips. It also came as buyers sought bargains just before Friday's options close.

The Dow Jones industrial average closed up 401.35 points at 8,979.26. The tech-heavy Nasdaq jumped ahead 5.49%, or 89.38 points, to close at 1,717.71. The S&P 500 rose 4.25%, or 38.59, to close at 946.43.

It wasn't enough to offset recent losses, but it was one of the few days the markets have closed up in the last two weeks of trading.

In keeping with a trend that's developed over the last couple of weeks, the Dow switched directions late in the day, with trading intensifying the results in the last hour. When the closing bell rang, the Dow had bounced nearly 800 points above the day's lows.

Investors' faith in technology seemed to rise, along with shares of Google, Yahoo, and Microsoft.

Microsoft CEO Steve Ballmer said that it still made sense for the Redmond, Wash.-based company to buy Yahoo, and shares of both companies rose afterward, although Microsoft indicated it's not interested in buying Yahoo.

Yahoo's shares rose 10.55%, or $1.24, to close at $12.99, while Microsoft shares closed at $24.19 after rising 6.75%, or $1.53.

Google shares also helped lift the Nasdaq, even before the company's after-hours release of its positive earnings report. Shares closed up 4.08%, or $13.85, at $353.02. In after-hours trading, shares rose more than 10% to trade at $390.

The increases occurred despite forecasts predicting that the overall problems with the economy could diminish growth of Internet ad sales for the first time in six years.

EBay, which has been battered in recent sessions, closed 2.35%, or 36 cents, lower for a 52-week low of $14.97. Its competitor managed to pull further away from its 52-week low, closing up 3.22%, or $1.57, at $50.29.

The Chicago Board of Options Exchange Volatility Index, also known as the "fear index," shot to an all-time high Thursday at 81.17, before settling down at 69.25. The peak of the index (which has never before broken the 80-point barrier) can signal a market bottom and the beginning of a turnaround, but only time will tell whether Thursday's figure is the highest it will climb.

One positive sign -- fewer job losses than expected -- may have helped some investors wade back into still-choppy waters. The U.S. Department of Labor reported 461,000 unemployment claims last week, after seasonal adjustment, instead of the 475,000 losses that forecasters had predicted.

Nevertheless, unemployment does remain high, the federal government is still working through its plan to rescue banks from the credit crisis, home values are low, foreclosures are high, manufacturing has slowed, and the view ahead remains unclear.

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