US stocks rose on Wednesday and the Nasdaq broke an eight-day losing streak, as talk of recession pushed investors into health care and other defensive sectors seen as resistant to a slowdown. After stocks kicked the year off with their worst five-day start ever, investors scoured the market for bargains among big technology names such as Apple Inc and Microsoft Corp.
Stocks like drugmaker Merck & Co and Coca-Cola Co also led indexes higher after Goldman Sachs was the latest to sound the recession alarm. The investment bank said US real gross domestic product would contract by 1 percent on an annualised basis in the second and third quarters.
"We certainly have reached some oversold levels with all the uncertainty going forward about interest rates and the economy," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. "You're always going to have people looking to buy at distressed price and now we've got some."
The Dow Jones industrial average was up 146.24 points, or 1.16 percent, at 12,735.31. The Standard & Poor's 500 Index was up 18.94 points, or 1.36 percent, at 1,409.13. The Nasdaq Composite Index was up 34.04 points, or 1.39 percent, at 2,474.55.
Trading was extremely volatile, with the market swinging from positive to negative several times during the session. It was the first trading day of 2008 that all three indexes closed higher. DuPont Co was the top gainer on the Dow after the chemical producer gave a favourable profit outlook, sending its shares up 4.9 percent to $44.78.
Merck shares rose 1.5 percent to $60.50, and Coca-Cola gained 2.6 percent to $65.27. Apple rose 4.9 percent to $179.40 as investors took advantage of a more than 10 percent year-to-date decline to snap up shares of company, which was one of the best-performing stocks of 2007.
Shares of Microsoft, another hot stock of 2007, rose 3 percent to $34.44 after starting the year on the downside. The top percentage gainer on the day was Apollo Group Inc. The operator of the University of Phoenix reported earnings late on Tuesday that topped Wall Street expectations. For-profit education companies like Apoloo are seen as resistant to recessions, since a soft employment market encourages people to seek job training and academic credentials.
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