U.S. banks and homebuilders carried stocks to their second gain this week after Lehman Brothers Holdings Inc. said bad home loans won't curtail earnings, helping erase a 136-point tumble in the Dow Jones Industrial Average.
By Nick Baker
March 14 (Bloomberg) -- U.S. banks and homebuilders carried stocks to their second gain this week after Lehman Brothers Holdings Inc. said bad home loans won't curtail earnings, helping erase a 136-point tumble in the Dow Jones Industrial Average.
Countrywide Financial Corp., the biggest U.S. mortgage lender, posted its first advance in five days as investors gained confidence mortgage delinquencies pose less of a risk to the financial system than previously thought. All 16 homebuilders in Standard & Poor's 500 indexes advanced.
Lehman's assessment helped ease concern mounting defaults among the riskiest borrowers will slow economic growth. Energy and technology companies also helped the Dow and S&P 500 recover today from earlier declines of more than 1 percent after oil prices climbed and JPMorgan upgraded Qualcomm Inc.
``Lehman got beaten up, then they faced it in their conference call and said `We can handle it,''' said Quincy Krosby, who helps manage $325 billion as chief investment strategist at the Hartford in Hartford, Connecticut. ``That gave confidence to buyers to come back in.''
The S&P 500 added 9.22, or 0.7 percent, to 1387.17 after earlier dropping to 1363.98, a four-month low. The Dow average rose 57.44, or 0.5 percent, to 12,133.40. The Nasdaq Composite Index increased 21.17, or 0.9 percent, to 2371.74.
Financial shares in the S&P 500 gained 0.6 percent after earlier dropping as much as 1.5 percent on subprime-lending concern. Lehman pared a loss of 5.5 percent to end the day down 28 cents, or 0.4 percent, to $71.72.
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