Wall Street opens higher, traders on guard for fresh volatility

 

Wall Street shares opened higher on Thursday while traders remained on guard for fresh volatility after growing fears of a US recession sent global markets into a nosedive earlier this week.

The Dow Jones Industrial Average was up 25.36 points (0.21 per cent) at 12,295.53 at 1441 GMT following a powerful rally a day earlier.

The tech-rich Nasdaq rose 18.87 points (0.81 per cent) to 2,335.28 while the broad-market Standard & Poor's 500 index gained 5.64 points (0.42 per cent) to 1,344.24.

"The stock market has priced in extremely bad news for the economic and earnings outlook. There will be more volatility, but current prices on many stocks will prove of good value over the course of the year," said Dick Green, a market analyst at Briefing.com.

Although US share prices surged on Wednesday following days of losses, the Dow is down by over seven percent for the year to date, traders said the gains may have been triggered by programmed computer trades and hedge fund bets.

US auto giant Ford Motor Co. said it had trimmed its losses and would take new cost-cutting measures, as it reported a fourth-quarter net loss of $2.8 billion (Dh10.22 billion).

For 2008, Ford said it anticipates a loss, but it expects the loss to be "better" than its 2007 performance. The automaker reported a full year 2007 lost of $2.7 billion (Dh9.85 billion).

Economic uncertainty has shaken Wall Street in recent weeks and Ford's top executive said he also anticipates an economic slowdown amid a two-year long housing market slump.

"Although our automotive operations are improving on a year-over-year basis, the US economy is slowing and the outlook for the auto industry remains challenging," Ford's president and chief executive officer Alan Mulally said.

Market participants said they were awaiting a fresh snapshot on the housing market and existing home sales due to be released later Thursday morning.

Some global markets posted strong gains, but Hong Kong share prices finished lower as news that a rogue trader had triggered losses of around seven billion dollars at French bank Societe Generale unsettled investors.

The trader, who is based in Paris but has not yet been identified, is believed to have built up the vast losses gambling on share futures. (AFP)