June 21 - Summary: The Dow and S&P 500 rebound in volatile trade after a two-day slide, but Nasdaq hampered by Oracle drop; Bond yields surge to 22-month high; Darden warns sluggishness still on the menu. Conway G. Gittens reports.
Wall Street fights hard for a rebound and in the end bounces back from the worst day in years. What made it so hard? Rising interest rates. Yields on the 10-year note surged to its highest in almost two years, hovering close to 2.6 percent. In the end, blue chips rallied 41 points. The S&P 500 rose 4 points but the Nasdaq slipped 7. The Wednesday-Thursday plunge may prove to be a buying opportunity, according to Tom Lee of JP Morgan. SOUNDBITE: TOM LEE, CHIEF EQUITY STRATEGIST, JP MORGAN (ENGLISH) SAYING: "I think this pullback has to be bought. Meaning people need to put the money to work because by the end of the year, I think we are going to be at least at 1715 or higher on the S&P 500." The S&P 500 closed the week at 1592 down 2.1 percent. As for the rest of the market: The Dow lost 1.8 percent over the past five sessions and the Nasdaq gave up 1.9 percent. Oracle held back the Nasdaq on Friday. Investors were less than forgiving one day after Oracle missed sales results for the second quarter in a row. The company blamed economic weakness in Asia and Latin America but investors are more worried that Oracle is failing to gain traction in cloud computing. The stock tumbled more than 9 percent to lows not seen in eight months. Sticking with earnings, the parent of Red Lobster says business is still being hurt by the slow economic recovery. Darden Restaurants, which also operates Olive Garden and several other casual dining chains, missing quarterly forecasts and issuing a cautious outlook. The results suggest middle-income diners are still feeling the squeeze. Investors put a squeeze on the stock - shares were down 2.1 percent. In international trading, German Chancellor Angela Merkel and Russian President Vladimir Putin support the U.S. Federal Reserve's decision to outline a timeline for when it will start scaling back economic support - even though markets don't seem to agree. Stocks in Germany slumped about 1.8 percent, fell 1.1 percent in France and down 0.7 percent in the U.K.