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Wall Street rebounds after two-session plummet

Wall Street headed higher on Tuesday as Goldman Sachs beat analyst earnings estimates and the European Central Bank injected over $500 billion into the banking system.

Goldman Sachs said on Tuesday that it earned $3.22 billion in the three-month period ended in November, or $7.01 a share, compared to $3.15 billion, or $6.59 a share, a year earlier. Analysts had, on average, expected the firm to earn $6.61 a share. Meanwhile, investors also got stimulated after the European Central Bank said Tuesday it awarded a higher-than-estimated €348.6 billion ($502.54 billion) in a 16-day tender. The Bank of England also said it will offer additional reserves to lenders Tuesday, after the US Federal Reserve conducted a $20 billion auction of 28-day credit. The Federal Reserve and other central banks said last week they would collaborate to pump in liquidity worldwide. However, no one can tell the end of the credit crunch and the market experienced seesaw movements on Tuesday, reflecting investors’ uncertainty about the economic problems.

Golden Sachs’ cautious forward-looking comments threw a damp over investors’ enthusiasm and the US Commerce Department reported Tuesday housing construction dropped 3.7% in November with single-family activity dropping to the lowest level in more than 16 years, as US home builders scrambled to reduce their inventories of unsold homes, showing troubles in the housing market.

The Dow Jones industrial average rose 65.27, or 0.50%, to 13,323.47, after gaining as many as 112 points. Broader stock indicators also advanced. The Standard & Poor’s 500 index rose 9.07, or 0.63%, to 1,454.97, and the Nasdaq composite index rose 21.57, or 0.84%, to 2,596.03. (people.com.cn)