Wall Street closes higher after GDP report in relatively calm trading

Source: Agencies  |   2008-10-31  |     ONLINE EDITION

WALL Street showed some welcome signs of stability yesterday, taking a downbeat gross domestic product report in stride and driving the Dow Jones industrial average up nearly 190 points in relatively calm trading. Even the last hour of the session, lately a period of turbulent activity, was comparatively quiet.

The market that a week ago was reeling from fears about recession was more composed after the Commerce Department's report that GDP fell at an annual rate of 0.3 percent during the third quarter. Analysts expected a 0.5 percent decline in GDP, the broadest measure of economic growth or contraction, but while the report was better than expected, it still pointed to an economy that is shrinking.

It's premature to say the market's volatility is over, most analysts expect trading to remain erratic for many months, and some believe investors will eventually test the lows that were reached on October 10, when the Dow traded as low as 7,882.51. But yesterday's trading session was the most placid in weeks, a sign that the market might be in the process of bottoming, analysts say. The Dow was only briefly in negative territory, and traded in a range of less than 300 points, well below the 400- and 500-point swings that have become commonplace.

"It does look like the market is taking a tentatively better tone today," said Alan Gayle, senior investment strategist, director of asset allocation for RidgeWorth Capital Management. "Pessimism and skepticism have become the dominant mode of thinking. And that's usually when I think that the market is more ripe for a rebound."