Stocks pared losses on Tuesday as the S&P 500 held above its February low, the Dow closed above 10,000, and House Financial Services Committee Chairman Barney Frank said forcing banks to wall off swaps-trading desks “goes too far.”
“It's a technical rebound,” said Ryan Detrick, senior technical analyst at Schaeffer's Investment Research. “We're watching the February low at 1,044” on the S&P 500, he said. “If we had a close beneath that level, that would without question show a major violation of support and could trigger a new wave of selling, sending the S&P 500 below 1,000.”
The Dow Jones industrial average closed down 22.82, or 0.23%, at 10,043.75 after plunging 292 points in morning trading. The S&P 500 ended up 0.38, or 0.04%, at 1,074.03 after dropping to 1,040.78 earlier, the weakest intraday level since Nov. 3. The Nasdaq composite index was off by 2.60, or 0.12%, to close at 2,210.95. All numbers are preliminary
Earlier declines came after bank borrowing costs rose and North Korea said it will sever ties with South Korea as tensions between the nations escalate.
The S&P 500 lost 12% from a 19-month high on April 23 through Monday on concern that mounting deficits in European countries will derail global growth, erasing a quarter of the index's 80% surge since March 9, 2009. Four Spanish banks said they will combine as regulators push lenders to merge and after the International Monetary Fund urged the nation to take more steps to overhaul its financial institutions.
Mr. Frank, D-Mass., who will lead congressional talks to produce a financial-regulation bill, said Senate wording that would require commercial banks to wall off their swaps-trading operations “goes too far.” His comments Tuesday at a conference in Washington are the latest indication that the contentious swaps-desk provision may not survive final negotiations over the legislation.