Wall Street rebounds erasing earlier losses

Dow Jones: 12,229.29 (–10.60) SP 500: 1,321.87 (+0.99) Nasdaq: 2,790.45 (+1.38)MOST US stocks rose yesterday, erasing an early slump, as Egyptian president Hosni Mubarak's plan to delegate authority to his vice-president spurred optimism the nation's political crisis will not threaten the global economy.

Whole Foods Market surged 12 per cent as the natural-goods grocer raised its annual forecasts.

Goodyear Tire and Rubber rose 14 per cent as the biggest US tiremaker reported earnings that beat analysts’ estimates.

The Dow Jones industrial average was down 10.60 points, or 0.09 per cent, at 12,229.29.

The Standard Poor’s 500 Index was up 0.99 points, or 0.07 per cent, at 1,321.87.

The Nasdaq Composite Index was up 1.38 points, or 0.05 per cent, at 2,790.45.

“Any step in the right direction toward a peaceful resolution (in Egypt) is good for the markets,” said Mark Turner, head of US sales trading at Instinet in New York, which handles about 4 per cent of US equity trading volume.

Egyptian President Mubarak said in a televised speech yesterday said that he decided to delegate his responsibilities to vice President Omar Suleiman.

Earlier yesterday US equities followed declines in Asian and European stocks after China lifted borrowing costs this week for the third time in four months.

US mortgage rates jumped to the highest level since April, Freddie Mac said, reducing affordability for homebuyers.

The average rate for a 30-year fixed loan rose to 5.05 per cent, the fourth-straight gain, Freddie Mac said.

Treasuries slid as initial claims for unemployment insurance fell to the lowest since July 2008.

Cisco shares tumbled 14 per cent to $18.92 on heavy volume.

Juniper Networks rose 7.6 per cent to $43.40.

Weighing also on the Dow was Wal-Mart Stores, which fell 2 per cent to $55.59 after UBS downgraded the stock.

UBS said a sales recovery at the retail giant could take longer than expected.

Deutsche Bank fell 2.6 per cent to $62.61 on the New York Stock Exchange.

Soft drink and snacks maker PepsiCo cut its full-year earnings growth target, sending shares down 1.6 per cent to $63.36. – (Bloomberg/Reuters)