Wall Street moved cautiously higher Friday, with investors taking a breather from the heavy selling of recent days. Energy, utility and technology stocks showed some advances, but bank stocks declined sharply.
A decrease in selling pressure wasn't necessarily a surprise given the scope of the declines in the past two days. On Thursday, the Standard & Poor's 500 index fell 6.7 percent to its lowest close since April 1997, while the Dow Jones industrial average fell 445 points, or 5.6 percent, to its lowest finish since March 2003.
Still, analysts were quick to note that Friday's gains might not be sustainable.
"The market looks good right now, but anything can happen," said David Katz, chief investment officer of Matrix Asset Advisors.
The market "has been acting irrational and manic depressive on a daily basis, and after two gruesome days of sell-off, you're just getting a bounce up," he said. "There is really no great rhyme or reason, or new news that's driving the market."
Energy names advanced as oil prices moved off their record lows from earlier this week. Exxon Mobil Corp. rose $2.93, or 4.3 percent, to $71.44, while Marathon Oil Corp. rose $1.20, or 6.1 percent, to $20.78.
A recovery in other commodity prices helped stocks like aluminum producer Alcoa Inc., which rose 95 cents, or 14 percent, to $7.80.
Among technology stocks, Microsoft Corp. rose $1.37, or 7.8 percent, to $18.90, while Hewlett-Packard Co. rose $1.59, or 5 percent, to $33.42.
Bank stocks fell, however, led by Citigroup Inc. The stocks initially rose following a report that the banking giant was considering a sale to boost investor confidence. The bank was scheduled to hold a board meeting Friday to discuss whether to sell all or part of itself, The Wall Street Journal reported. But as no hard news emerged from the company about that possibility, Citigroup's shares tumbled to below $4 a share _ their lowest level in more than 15 years.
Bank of America Corp. fell 62 cents, or 5.5 percent, to $10.63, while Merrill Lynch & Co. fell 22 cents, or 2.8 percent, to $7.74.
"Obviously, one of the biggest issues today is Citigroup, and will that bank survive in its current form," said Joe Heider, president of Dawson Wealth Management in Cleveland. "I think we would get a bounce if it wasn't for the fact that it's Friday and the concern of having long positions over the weekend with the uncertainty of Citigroup."
In early afternoon trading, the Dow Jones industrial average gained 84.34, or 1.12 percent, to 7,636.63. The Dow's rise followed a drop in the blue chips of 10.4 percent Wednesday and Thursday, the biggest two-day slide since October 1987.
The Standard & Poor's 500 index rose 12.01, or 1.60 percent, to 764.45, and the Nasdaq composite index rose 13.18, or 1.00 percent, to 1,329.30.
The Russell 2000 index of smaller companies fell 2.52, or 0.65 percent, to 382.79.
Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume came to 1.05 billion shares. The expiration Friday of some options contracts for November could add to the market's volatility during the session, particularly in the final hour.
With the steep pullbacks this week, the Dow began Friday's session down 43.1 percent this year, while the S&P 500 index _ a benchmark for the overall U.S. stock market _ was down 48.8 percent. The Nasdaq composite index has lost 50.4 percent this year.
Jack Ablin, chief investment officer at Harris Private Bank in Chicago, contends the array of questions facing the market are a sign that volatility will remain a major force on Wall Street for some time to come. He said worries about marquee companies from General Motors to Citigroup are unnerving investors.
"Investors need closure. There are so many unanswered questions either before Congress, in front of the markets, in corporate boardrooms that it makes investing for the next three months virtually impossible let alone for the next five years," Ablin said. "What we're seeing is these symbols of American business history really suffering and prompting investors to call into question the viability of the system."
Investors have grown increasingly anxious this week that losses from souring debt will swamp banks, even those given financial support through the government's $700 billion rescue plan. Citigroup, in particular, is a concern for Wall Street because the company hasn't booked a profit in the past four quarters.
Investors have also worried about the fate of General Motors Corp., Ford Motor Co. and Chrysler LLC. The heads of the companies, warning that automakers are perilously low on cash, have been asking Washington for $25 billion in loans. But lawmakers have likely put off a vote on whether to extend a lifeline until next month and have asked the automakers for detailed plans about how they would use the money. The prospect of a bankruptcy filing by one or more of the companies has added to Wall Street's worries about the state of the economy.
Bond prices fell Friday as credit markets eased somewhat following a freeze-up Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 3.23 percent from 3.00 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.02 percent from 0.01 percent late Thursday.
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