NEW YORK, Aug 24, 2007 (AFP) – Wall Street found its footing over the past week after the market’s drubbing earlier this month, as investors pondered whether the storm over housing and a related credit squeeze was over. Despite a strong rebound in the week to Friday, analysts said they expect nervous trading ahead with market participants looking for signs of contagion from the US housing and mortgage crisis.
The blue-chip Dow Jones Industrial Average rallied 2.29 percent in the week to Friday to 13,378.87, recouping some of its heavy losses from earlier this month.
The broad-market Standard & Poor’s 500 advanced 2.31 percent to 1,479.37 while the tech-dominated Nasdaq composite leapt 2.86 percent to 2,576.69.
Sentiment was helped by what appeared to be a partial thawing in frozen credit markets, easing fears of a money squeeze that could spill over to corporate and consumer borrowing and drag on economic activity.
“While the stock market remains nervous regarding the impact of the current mortgage credit crisis and the meltdown of the commercial paper market, the tension level appears to have relaxed over the last few days,” said Frederic Dickson, market strategist at DA Davidson.
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