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Stock market rebounds from worst day of the year

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Good news on housing and earnings Tuesday morning helped stocks begin a rebound from their worst day of the year.

The Dow Jones industrial average rose 134 points, or 0.9 percent, to 14,733 as of 11:55 a.m., winning back some of the 265 points it lost a day earlier.

Home construction topped 1 million last month, the highest level since June 2008. Strong earnings from companies including Coca-Cola also propelled the market higher.

Optimism about housing and a pickup in hiring were major catalysts driving the stock market's surge early this year. The Dow and the Standard & Poor's 500 jumped 11.3 percent and 10.3 percent, respectively, in the first three months of 2013.

That run-up was interrupted Monday when stocks had their biggest decline since November. Worries about an economic slowdown in China led to a drop in prices for oil, copper, and other commodities, causing mining and energy stocks to fall. The rally had also slowed at the start of this month after reports suggested that the economy was slowing down.

"This is the first time in a while that we've had pretty positive numbers," said JJ Kinahan, chief derivatives strategist for TD Ameritrade. "We had one bad day yesterday. You can't say because of that one bad day that all bets are off."

Many of those stocks were rising Tuesday as commodities markets stabilized.

Gold, which was at the epicenter of Monday's sell-off, rose $25.50, to $1,380 an ounce.

The precious metal logged its steepest fall in 30 years Monday, falling $140 an ounce in a selling frenzy. Investors started selling gold Friday after the government reported a drop in inflation. People often buy gold when they're fearful of rising prices and sell it when they see inflation ebbing.

Copper was little changed. Crude oil fell 91 cents, to $88 a barrel.

Materials stocks rose the most of the 10 industry groups in the S&P after leading the market lower the day before. Freeport-McMoRan Copper & Gold was up 1.2 percent at $29.61, a day after plunging 8 percent, the biggest drop in the S&P 500 index.

Home builders rose following the housing report. PulteGroup rose 34 cents, to $18.18, and Lennar climbed 43 cents, to $38.24.

In other trading, the Standard & Poor's 500 climbed 13.3 points, or 0.85 percent, to 1,565. The NASDAQ composite rose 31 points, or 0.9 percent, to 3,247.

Small company stocks performed better than the broader market. The Russell 2000 index climbed 10.5 points, or 1.2 percent, to 917.70. The index plunged 3.8 percent Monday.

Coca-Cola gained $2.09, to $42.18, after its first-quarter results came in above Wall Street's forecasts. Coke said it struck a deal to start refranchising its business in the U.S., which will lower costs.
 

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  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

  3. I don't know about the rest of you but I only stop at these places for one reason, and it's not to picnic. I move trucks for dealers and have been to rest areas in most all 48 lower states. Some of ours need upgrading no doubt. Many states rest areas are much worse than ours. In the rest area on I-70 just past Richmond truckers have to hike about a quarter of a mile. When I stop I;m generally in a bit of a hurry. Convenience,not beauty, is a primary concern.

  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.

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