Bargain-hunting drives slight gains for U.S. stocks

Trader Kevin Lodewick works on the floor of the New York Stock Exchange Tuesday, Feb. 4, 2014. Stocks are mixed on Wall Street after suffering big losses the day before. (AP Photo/Richard Drew)

ASSOCIATED PRESS

Trader Steven Kaplan, center, works on the floor of the New York Stock Exchange. Stocks are mixed on Wall Street after suffering big losses the day before.

NEW YORK -- Investors went hunting for bargains a day after U.S. stocks racked up the biggest losses in more than seven months.

The buying helped lift major stock indexes out of the red today. Prices of U.S. government bonds fell.

The mini-rebound seemed fragile at times, with the market giving up some of its earlier gains by late afternoon.

Markets were coming off a 326-point drop in the Dow Jones industrial average on Monday, and the blue-chip index’s worst January performance in five years prompted by disappointing news about U.S. manufacturing.

“It was the biggest hole we’ve seen for quite a bit, so it’s not surprising to see a green day after a couple days of red,” said Andres Garcia-Amaya, a global market strategist with J.P. Morgan Funds.

Portfolio managers seized on the aftermath of Monday’s sell-off to buy, even as many stock watchers acknowledged that the market could still be in for a correction, or a drop of at least 10 percent.

“The one thing you never know is when the bottom is going to hit in a downturn,” said Quincy Krosby, a market strategist with Prudential Financial. “So what you might do is at least begin the process of building your position.”

Among the biggest gainers on the day were fashion retailer Michael Kors Holdings, water technology provider Xylem, and Yum Brands! -- the owner of Pizza Hut, KFC, and Taco Bell restaurant chains.

Trading was relatively light for much of the day, picking up by late afternoon. But most of the active stocks were in the green.

All told, the Dow rose 72.44 points, or 0.5 percent, to close at 15,445.24 today. The Standard & Poor’s 500 index climbed 13.31 points, or 0.8 percent, to 1,755.20. The Nasdaq composite gained 34.56 points, or 0.9 percent, to 4,031.52.

Even with today’s gains, the Dow is down 6.8 percent this year, and the S&P 500 index is off 5 percent .