Dow Jones 30: Industrials Index

[setravis]

Stocks surge higher, led by financial sector
Wednesday July 30, 2008


Wall Street soared for the second straight day Wednesday, rallying in the last hour of trading after a rebound in financial stocks and optimism about private sector jobs.
Investors brushed off a sharp jump in oil prices. The Dow Jones industrials rose more than 180 points, bringing its two-day gain to more than 450.



Bank and brokerage stocks, many trading at multiyear lows, turned higher and led the late advance. There was some relief in the market after the Federal Reserve said it would extend and expand its program to lend money to investment banks. The central bank's move reassured the market that the banks would have cash if they needed it.

Investors have been worried that some of Wall Street's biggest names will be slashing prices on more of their assets -- and needing more money -- after Merrill Lynch & Co. unexpectedly announced a $5.7 billion write-down late Monday.

"There's a growing sense that what we saw out of Merrill Lynch is the beginning of the end for the financial cleanup," said Craig Peckham, market strategist at Jefferies & Co. He added that the ADP number was also a good sign for the economy.

Earlier, Automatic Data Processing said private sector employment rose by 9,000 this month. After seeing jobs disappear by the thousands in recent months, the stock market is eager for any insights into the Labor Department's take on the job market on Friday.

The ADP news helped offset a big spike in the price of oil after a weekly Energy Department report showed a surprise decrease in U.S. gasoline supplies. Israeli Prime Minister Ehud Olmert's announcement that he plans to resign in September stirred concerns about the viability of Middle East peace efforts and rising tensions with Iran.

Light, sweet crude rose $4.58 to settle at $126.77 on the New York Mercantile Exchange. Oil has fallen sharply, however, since hitting a high above $147 on July 11. A drop in oil prices Tuesday contributed to a huge gain on Wall Street.

The late rally may also have been due to technical trading; in times of great volatility, many institutional investors start adjusting their holdings before the closing bell.

The Dow rose 186.13, or 1.63 percent, to 11,583.69. On Tuesday, the blue chips jumped 266 points, more than wiping out a nearly 240-point loss from the previous session.

Broader stock indicators also surged. The Standard & Poor's 500 index advanced 21.06, or 1.67 percent, to 1,284.26, and the Nasdaq composite index rose 10.10, or 0.44 percent, to 2,329.72.

Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where consolidated volume came to 5.06 billion shares from 5.11 billion in the previous session.

Bond prices fell as stocks advanced, diminishing demand for the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.05 percent from 4.04 percent late Tuesday.

The dollar was higher against other major currencies, while gold prices fell.

Shares of Morgan Stanley and Lehman Brothers Holdings Inc. climbed more than 5 percent, while Citigroup Inc. and Merrill Lynch rose about 2 percent.

Fannie Mae and Freddie Mac, the government-chartered mortgage companies which together hold or back nearly half of all U.S. mortgage debt, also rose on news of the Fed's latest moves. Fannie Mae advanced 45 cents, or 3.9 percent, to $12.05, while Freddie Mac rose 6 cents to $8.48.

Wall Street has been juggling a number of intertwined worries in recent months as it tries to determine where the economy is headed. There is continued concern about bad mortgage debt that many banks are holding because homeowners swept up in the pullback in the housing market are missing mortgage payments.

And the rapid rise in oil and other commodity prices this year has only made it harder for many consumers to keep up with their bills. Any sign of an easing in the credit and housing markets, or a drop in energy prices, offers some investors hope that the economy could begin to recover.

Investors are anxious for the government's advance reading on second quarter gross domestic product, which is due Thursday. Economists expect that, while it might not feel like it to many consumers, the economy is still eking out growth. A good chunk of it may be due to government tax rebates.

In earnings news, Starbucks Corp. said costs related to its closure of 600 underperforming stores led it to post a loss in its fiscal third quarter. However, it matched Wall Street projections.

The Walt Disney Co. said third-quarter profits surged nearly 9 percent thanks to revenue growth at ESPN and strong results from its theme park near Paris, where the weak U.S. dollar was helpful.

The Russell 2000 index of smaller companies rose 4.31, or 0.60 percent, to 718.86.

Overseas, Japan's Nikkei stock average rose 1.58 percent. Britain's FTSE 100 jumped 1.91 percent, Germany's DAX index advanced 0.96 percent, and France's CAC-40 jumped 1.85 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

[setravis]

Stocks pull back after another decline in jobs.......
Friday August 1, 2008 
Wall Street pulls back on rise in unemployment rate, flat manufacturing activity, GM loss


Wall Street retreated again Friday after readings on jobs and manufacturing -- the first reports for the third quarter -- indicated that businesses and workers still face a tough economy. The major indexes ended a turbulent week narrowly mixed.


A massive quarterly loss at General Motors Corp. and rising oil prices also gave investors reason to trade cautiously. But the market was considerably calmer than the first four sessions of the week, when the Dow Jones industrials rose or fell by triple digits each day in response to economic data or news about the financial sector.

Friday's reports were not as poor as many analysts had anticipated, which likely accounted for the muted reaction. Nonetheless, they portrayed an economy that was still sagging as it entered the second half of the year. The Labor Department said jobs fell for the seventh straight month in July by 51,000 -- less than expected -- but that the unemployment rate rose to a greater-than-expected 5.7 percent. The report arrived after data Thursday that showed an unexpected jump in jobless claims to a five-year high.

"It reinforces the idea that we're seeing a steady, but not dramatic, decline in employment, which is likely to last for some time," said Michael Sheldon, chief market strategist at RDM Financial Group in Westport, Conn.

Meanwhile, the Institute for Supply Management said manufacturing activity was flat in July. Given Thursday's disappointing report on gross domestic product growth, Wall Street is becoming more certain that the United States is in a recession -- and one that could be prolonged. U.S. recessions since World War I have lasted about 10 months, on average, but have ranged from as little as six months to as long as 16 months, Sheldon said.

The flagging economy has sapped consumers' ability to spend freely, which in turn is hurting profits at many big companies. GM said it lost $15.5 billion in the second quarter, more than analysts predicted and the automaker's third-worst loss in its history.

There was also more bad news about construction; the Commerce Department reported that building activity declined in June. And the price of oil rose $1.02 to $125.10, retreating from an earlier gain of more than $4, but still signaling that its steep decline of recent weeks has at least temporarily been halted.

The Dow fell 51.70, or 0.45 percent, to 11,326.32. The blue-chip index ended the week down 0.39 percent.

Broader stock indicators also lost ground Friday. The Standard & Poor's 500 index fell 7.07, or 0.56 percent, to 1,260.31, and the Nasdaq composite index fell 14.59, or 0.63 percent, to 2,310.96.

Advancing issues, however, narrowly outnumbered decliners Friday on the New York Stock Exchange. Consolidated volume came to a relatively light 4.54 billion shares, down from 5.16 billion billion shares Thursday.

The S&P finished the week up 0.21 percent, and the Nasdaq finished up 0.02 percent.

Bond prices edged higher in Friday's trading. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.94 percent from 3.95 percent late Thursday. The dollar was mixed against other major currencies, while gold prices fell.

The market's performance the past few sessions shows how jumpy investors are. The Dow zigzagged up and down by hundreds of points as the market alternately agonized over the financial sector and signs of economic weakness, and then soared as investors decided things weren't really all that bad after all.

Some analysts believe that a stock market bottom may have been reached, even if an upswing isn't under way. Others, however, are more cautious and wondering if more declines are to come -- particularly after Merrill Lynch & Co. announced billions of dollars in extra credit-related declines this week.

However, most financial stocks performed well Friday, with investors are cautiously optimistic that banks and other financial services companies -- while still losing money on their hefty investments in troubled debt -- are starting to clean up their books.

Bond insurer Ambac Financial Group Inc. said it agreed to pay $850 million to settle one of its largest exposures to risky debt instruments called collateralized debt obligations. Ambac rose $1.27, or 50 percent, to $3.79, while rival MBIA Inc. rose $1.74, or 29 percent, to $7.67.

Other gainers included Dow component American International Group, up 74 cents, or 2.8 percent, at $26.79; Wachovia Corp., up $1.71, or 9.9 percent, at $18.98; and Lehman Brothers Holdings Inc., up $1.31, or 7.6 percent, at $18.65.

Shares of GM, another Dow component, gave up 84 cents, or 7.6 percent, to $10.23 after posting its quarterly loss.

Most companies' quarterly results have been surpassing Wall Street's forecasts. And beyond financial and consumer discretionary sectors, corporate earnings have been increasing.

"There is some room for optimism on the corporate profit front," Sheldon said. "But a lot will depend on consumers and energy prices for the remainder of the year."

Meanwhile, a few pharmaceutical stocks suffered sell-offs on Friday. Biogen Idec Inc. and Elan Corp. PLC fell due to safety concerns related to multiple sclerosis therapy Tysabri. Biogen dropped $19.75, or 28 percent, to $50.01, and Elan tumbled $10.12, or 50 percent, to $9.93.

The Russell 2000 index of smaller companies rose 1.64, or 0.23 percent, to 716.16.

Overseas, Japan's Nikkei stock average fell 0.14 percent. Britain's FTSE 100 fell 1.06 percent, Germany's DAX index declined 1.28 percent, and France's CAC-40 fell 1.78 percent.

The Dow Jones industrial average ended the week down 44.37, or 0.39 percent, at 11,326.32. The Standard & Poor's 500 index finished up 2.62, or 0.21 percent, at 1,260.31. The Nasdaq composite index ended the week up 0.43, or 0.02 percent, at 2,310.96.

The Russell 2000 index finished the week up 5.82, or 0.82 percent, at 716.16.

The Dow Jones Wilshire 5000 Composite Index -- a free-float weighted index that measures 5,000 U.S. based companies -- ended Friday at 12,888.21, up 51.11 points, or 0.40 percent, for the week. A year ago, the index was at 14,755.40.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

[setravis]

Wall Street advances after oil declines
Wednesday August 6, 2008
Stocks rise as drop in oil offsets unease over Freddie Mac; Cisco helps lift tech names


Wall Street logged another winning day Wednesday as a drop in oil prices and a better-than-expected profit report from technology bellwether Cisco Systems Inc. helped corral the market's worries about the financial sector.


Oil extended its slide into a third day. Light, sweet crude settled down 59 cents at $118.58 a barrel on the New York Mercantile Exchange after the government reported a jump in domestic inventories; oil is now down about $30 from its record high of $147.27 reached July 11.

Cisco rose more than 5 percent after the networking equipment company late Tuesday posted earnings that narrowly topped Wall Street's forecast. The report helped buoy sentiment and lifted the technology-laden Nasdaq composite index.

The buying came a day after Wall Street had a huge rally -- an advance that in early trading Wednesday looked like it might not hold. Investors began the day fearing more industrywide write-downs of bad home loans after mortgage financier Freddie Mac reported a larger-than-expected second-quarter loss. But a reversal in oil prices, continuing a decline that propelled stocks sharply higher Tuesday, helped calm investors about the forces tugging at the economy.

The well-being of Freddie Mac and sister company Fannie Mae is a big concern on Wall Street as the government-chartered companies hold or back nearly half of all U.S. mortgage debt. The companies have lost billions of dollars due to failed loans over the past year; the federal government has pledged to help both companies with larger lines of credit or stock purchases if necessary.

Lincoln Anderson, chief investment officer and chief economist at LPL Financial in Boston, said that while the troubles in the financial sector aren't over, investors are somewhat emboldened by the slide in oil and signs of strength in the dollar.

"I think we're getting into better territory. I've been very much focused on the fall in oil prices as a necessary ingredient to avoid recession. To the extent that we're getting that that's just great," he said.

The Dow Jones industrial average rose 40.30, or 0.35 percent, to 11,656.07, after having been down nearly 100 points early in the session. The gain brought the Dow's two-day advance to about 370 points. The blue chips soared Tuesday on the drop in oil, and also in response to a reassuring economic statement from the Federal Reserve.

Broader stock indicators also advanced again Wednesday. The Standard & Poor's 500 index rose 4.31, or 0.34 percent, to 1,289.19, and the Nasdaq rose 28.54, or 1.21 percent, to 2,378.37.

Bonds slipped as more investors left the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.05 percent from 4.02 percent late Tuesday.

The dollar rose to eight-week highs against the euro and seven-month highs against the yen, while gold prices fell.

Investors showed enthusiasm for technology names Wednesday. Cisco rose $1.28, or 5.7 percent, to $23.93 after its report. Microsoft Corp., one of the 30 stocks that make up the Dow, rose 81 cents, or 3.1 percent, to $27.02.

But financials remained a weak spot. Freddie Mac fell $1.55, or 19 percent, to $6.49, while Fannie Mae fell $2, or 15 percent, to $11.60. Freddie Mac, which substantially increased its reserves for souring loans, lost about three times what Wall Street expected on a per-share basis. The company also announced that it expects to cut its third-quarter dividend.

Other financial stocks also fell as investors worried about the sector. Citigroup Inc. slipped 22 cents to $19.70, while Wachovia Corp. fell 65 cents, or 3.4 percent, $18.41.

J. Stephen Lauck, chief executive and portfolio manager at Ashfield Capital Partners in San Francisco, said impressions about the health of the financials will continue to shape investor sentiment.

"It's a very cautious environment," he said. "What we need in this market is for the financial stocks to stabilize. I think they'll stabilize well before the housing market fixes itself."

Lauck said the housing sector will likely take several years to recover. In the meantime, the drop in energy prices, as well as a retreat in gold and other commodities, is offering investors some solace.

"This commodity pullback is very timely because I think it does take that stress point away from the market," Lauck said.

But even with the pullback in oil prices, investors appeared cautious about placing bets on companies that do best when consumers are in a mood to spend. Rising commodity costs have hurt consumers, whose spending accounts for more than two-thirds of U.S. economic activity. Among consumer discretionary stocks, TJX Cos., parent of the T.J. Maxx and Marshalls retail chains, fell 91 cents, or 2.6 percent, to $34.47.

Sprint Nextel fell $1.21, or 14 percent, to $7.34 after posting a second-quarter loss on severance and other costs.

Advancing issues outnumbered decliners by about 9 to 7 on the New York Stock Exchange, where consolidated volume came to a relatively light 4.77 billion shares, compared with 5.35 billion Tuesday.

The Russell 2000 index of smaller companies rose 4.86, or 0.67 percent, to 725.90.

Overseas, Japan's Nikkei stock average rose 2.63 percent. Britain's FTSE 100 rose 0.58 percent, Germany's DAX index added 0.65 percent and France's CAC-40 jumped 1.41 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

[setravis]

Stocks fall on worries about financial sector
Thursday August 7,2008
Stocks tumble on worries about financials, unemployment, retail sales; Dow falls 224


Wall Street tumbled Thursday as further troubles in the financial sector, higher unemployment and lackluster retail sales touched off fresh concerns about the economy. The Dow Jones industrials skidded nearly 225 points, while bond prices shot higher as investors once again sought the safety of government debt.


The stock market's pullback erased most of the 370-point gain the Dow logged the prior two sessions and shows the lack of solid conviction behind many of investors' recent bets.

Heading the list of worries, insurer American International Group Inc. reported a loss of more than $5 billion for the second quarter and the Labor Department said the number of newly laid off people seeking jobless benefits last week jumped to its highest level in more than six years. Weak sales reports from Wal-Mart Stores Inc. and other retailers added to investors' unease.

Meanwhile, an announcement by the credit-ratings agency Moody's Investors Service that it placed the long-term ratings of credit card lender American Express Co. on review for possible downgrade exacerbated investors' nervousness.

Bill Stone, chief investment strategist for PNC Wealth Management, said the stream of economic news has been somewhat negative lately, often short-circuiting the market's attempts to build on rallies. Thursday's reports on employment and financials only added to the uneasiness, he said.

"The concerns about a weakening economy always run to worries about the financials and then you add some negative news to them on their own and you've got what we've got today," he said.

The Dow fell 224.64, or 1.93 percent, to 11,431.43. It was the Dow's sixth triple-digit move in the past two weeks, illustrating how commonplace big swings in the indexes have become amid investors' uncertainty about the economy.

Broader indicators also slid Thursday. The Standard & Poor's 500 index fell 23.12, or 1.79 percent, to 1,266.07, and the Nasdaq composite index fell 22.64, or 0.95 percent, to 2,355.73.

Oil prices that fell sharply earlier in the week rebounded Thursday, likely adding to Wall Street's downbeat mood. Light, sweet crude rose $1.44 to settle at $120.02 on the New York Mercantile Exchange.

Bonds jumped as investors sought the protection of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its prices, fell to 3.93 percent from 4.05 percent late Wednesday. The dollar mostly rose against other major currencies, while gold prices fell.

The Labor Department said the number of newly laid off people seeking jobless benefits increased by a seasonally adjusted 7,000 to 455,000 last week, the highest level since late March 2002. Wall Street had expected new claims to rise to around 430,000.

The number of people continuing to collect unemployment benefits rose for the week ending July 26 to the highest level since early December 2003, the Labor Department said. In recent weeks, General Motors Corp., Weyerhaeuser Co. and Starbucks Corp. have all announced job cuts, sending more people to the unemployment lines.

Stocks briefly pulled off their lows in the session after the National Association of Realtors said its seasonally adjusted index of pending sales for existing homes rose 5.3 percent in June from May, rather than declining as economists had expected. Despite the June increase, the index sits 12 percent below year-ago levels.

Jerry Webman, chief economist at Oppenheimer Funds Inc., said the swift pullback in stocks after the day's economic readings illustrates the fragility of investor sentiment. He said the market's volatility reflects an undercurrent of uncertainty and efforts by some traders to capitalize on shifts in the mood.

"We react very strongly to bits of news," he said. "The whipsaw danger is pretty high here."

American International Group fell $5.25, or 18 percent, to $23.84 after the company reported its loss and said weakness in the credit markets has erased several billions of dollars in value from its credit default swaps portfolio and other investments. The stock was by far the steepest decliner among the 30 that make up the Dow industrials.

Other insurers declined following AIG's report. Genworth Financial Inc. fell $1.62, or 9.9 percent, to $14.67.

American Express fell $1.59, or 4.2 percent, to $36.40 after the Moody's announcement.

Citigroup Inc. fell $1.23, or 6.2 percent, to $18.47 after federal and state regulators announced settlements Thursday in which the company will repurchase more than $7 billion in auction-rate securities and pay $100 million in fines. The company neither acknowledged nor denied wrongdoing under the settlements. New York Attorney General Andrew Cuomo had threatened to charge Citigroup with fraudulent sales of auction-rate securities and with the destruction of key documents.

The latest worries about financials offered an unwelcome reminder of the trouble companies are having with bad debt on their balance sheets. Tightness in the credit markets makes it hard for companies to unload and even value mortgages and other paper. And the reports of rising unemployment Thursday only added to fears that defaults on mortgages and other borrowings aren't likely to end soon as consumers continue to struggle.

The results from Wal-Mart and other retailers fanned concerns about consumer spending, which accounts for more than two-thirds of U.S. economic activity.

Wal-Mart, the world's largest retailer, said same-store sales, or stores open at least one year, rose 3 percent in July as consumers began using up their government stimulus money. Analysts who follow the important measure of a retailer's health had expected a 3.4 percent rise, on average. Wal-Mart, also a Dow stock, fell $3.80, or 6.3 percent, to $59.96.

Other retailers' reports disappointed Wall Street. Target Corp. fell $2.25, or 4.7 percent, to $45.76, while Macy's Inc. fell 76 cents, or 3.9 percent, to $18.92.

Declining issues outnumbered advancers by about 3 to 1 on the New York Stock Exchange, where consolidated volume totaled 5.09 billion shares, compared with 4.77 billion shares traded Wednesday.

The Russell 2000 index of smaller companies fell 12.49, or 1.72 percent, to 713.41.

Overseas, Japan's Nikkei stock average fell 0.98 percent. Britain's FTSE 100 fell 0.16 percent, Germany's DAX index fell 0.27 percent, and France's CAC-40 added 0.20 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

[setravis]

Stocks jump as oil prices fall sharply
Friday August 8,2008
Stocks surge after rise in dollar and drop in oil ease worries about financials; Dow jumps 300


Wall Street rebounded smartly Friday, shooting higher as a surge in the dollar and another plunge in oil prices eased some of investors' worries about losses at mortgage finance company Fannie Mae. The Dow Jones industrials soared more than 300 points, more than wiping out a big loss from the previous session, and all the major indexes had their best weekly gains since April.


The session extended a streak of volatility that has seen the Dow making frequent triple-digit moves as investors reacted feverishly to news about the financial sector, corporate earnings and the economy.

On Friday, the dollar, which has sagged along with the economy, reached its highest level against the euro since February, and in the process sent a wave of confidence through the stock market. And because the dollar's strength has contributed to the recent skid in oil prices, light, sweet crude dropped sharply again, falling $4.82 a barrel to settle at $115.20 on the New York Mercantile Exchange. That brought crude's decline over the past four weeks to more than $30.

Investors see the drop in oil as a big boost for the economy, because it should allow consumers to spend more freely. For the moment, that has allowed the market to set aside nervousness about the financial sector, which is still contending with the fallout from the year-old credit crisis.

Fresh financial worries surfaced Friday after Fannie Mae, the largest U.S. buyer and backer of home loans, reported a quarterly loss more than three larger than what Wall Street had expected and said it would slash its quarterly dividend to conserve cash.

Philip S. Dow, managing director of equity strategy at RBC Dain Rauscher in Minneapolis, said that while the strength in the dollar and the resulting drop in oil were attracting buyers Friday, Wall Street's recent back-and-forth trading illustrates investors' great anxiety.

"We live in a market where people react, they don't anticipate," he said. "So you've got this market that's kind on a seesaw every day reacting to news."

The Dow rose 302.89, or 2.65 percent, to 11,734.32. The blue chips fell nearly 225 points Thursday after concerns about the financial sector, a weak showing by retailers in July and a spike in weekly unemployment claims; Friday's advance marked the seventh time in two weeks that the Dow rose or fell by triple digits.

Broader indicators also rose sharply Friday. The Standard & Poor's 500 index advanced 30.25, or 2.39 percent, to 1,296.32 and the Nasdaq composite index advanced 58.37, or 2.48 percent, to 2,414.10.

For the week, the Dow rose 3.6 percent, the S&P gained 2.9 percent and the technology-heavy Nasdaq jumped 4.5 percent. It was their best weekly performance since the week ended April 18.

Bonds ticked lower as stocks jumped, easing demand for the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its prices, rose to 3.94 percent from 3.93 percent late Thursday. Gold prices fell. Prices rebounded in after-hours trading, sending the 10-year yield to 3.93 percent.

The dollar's rise against the euro came after the European Central Bank and the Bank of England separately left their benchmark interest rates unchanged Thursday. With the ECB signaling more rate hikes aren't likely, the euro wasn't as attractive as an investment option.

Kelli Hill, a portfolio manager at Ashfield Capital Partners in San Francisco, said a more robust dollar not only makes commodities like oil less expensive but can also offer a much-needed dose of faith in the U.S. markets and economy.

"People want to sell on anything or buy on anything," she said, noting that light trading volume can exacerbate the market's gyrations. "Strengthening in the dollar is a good thing not only for business but also to build back confidence both domestically and internationally."

She is optimistic the markets will recover and said the rebound could come swiftly once the money sitting on the sidelines gets a sense that the economy is poised to turn higher.

The falling price of oil also overshadowed a Labor Department report showing that U.S. workers' efficiency grew at a slightly slower pace in the second quarter. Worker productivity grew at an annual rate of 2.2 percent. Economists surveyed by Thomson/IFR had predicted growth would come in at 2.7 percent compared with 2.6 percent in the first quarter. Still, some market watchers said any gains are positive.

Fannie Mae reported a loss of $2.3 billion, or $2.54 a share. Analysts surveyed by Thomson Financial had expected the company to report a loss of 68 cents a share. The company also said it would cut its quarterly dividend to 5 cents from 35 cents. Fannie Mae fell 90 cents, or 9 percent, to $9.05.

The report from Fannie Mae follows a loss Wednesday from fellow mortgage financier Freddie Mac that was more than three times larger than Wall Street analyst had expected.

McDonald's Corp. said strong demand for breakfast items helped lifted global same-store sales 8 percent in July. The world's largest hamburger chain said same-store sales, or sales at locations open at least a year, rose 6.7 percent in the U.S. The stock, one of the 30 that comprise the Dow industrials, rose $3.81, or 6.2 percent, to $65.67 after reaching a new high of $66.24.

While the drop in oil helped stocks in general, certain sectors like the airlines, which have been hit by soaring fuel prices, showed steep gains. United Airlines parent UAL Corp. jumped $1.52, or 16 percent, to $11.13, and Continental Airlines Inc. rose $1.73, or 12 percent, to $16.48.

Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange, where consolidated volume came to a relatively light 4.82 billion shares compared with 5.09 billion shares traded Thursday.

The Russell 2000 index of smaller companies rose 20.89, or 2.93 percent, to 734.30.

Global wasn't affected by a 4.5 percent drop Friday in the Shanghai Composite Index. China's benchmark index fell to its lowest level in nearly 19 months over investor disappointment that a rally tied to the Beijing Olympic games didn't develop.

Elsewhere overseas, Japan's Nikkei stock average rose 0.33 percent. Britain's FTSE 100 rose 0.21 percent, Germany's DAX index rose 0.28 percent, and France's CAC-40 rose 0.77 percent.

The Dow Jones industrial average ended the week up 408.00, or 3.60 percent, at 11,734.32. The Standard & Poor's 500 index finished up 36.01, or 2.86 percent, at 1,296.32. The Nasdaq composite index ended the week up 103.14, or 4.46 percent, at 2,414.10.

The Russell 2000 index finished the week up 18.14, or 2.53 percent, at 734.30.

The Dow Jones Wilshire 5000 Composite Index -- a free-float weighted index that measures 5,000 U.S. based companies -- ended Friday at 13,197.13, up 308.92 points, or 2.40 percent, for the week. A year ago, the index was at 14,641.03.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

[setravis]

Stocks fall sharply amid financial sector concerns
Tuesday August 12, 2008
Wall Street falls sharply as investors grow concerned about losses at financial companies


Wall Street skidded lower Tuesday as downbeat news from JPMorgan Chase & Co. and other financial companies lifted the market's anxiety about the continuing impact of the credit crisis on the economy. The Dow Jones industrials fell nearly 140 points.


The latest reminder of continuing troubles for banks and brokerages came when JPMorgan said late Monday it has incurred wider losses in its mortgage holdings so far in the third quarter than in the second quarter. The nation's second-largest bank by assets said in a regulatory filing it lost $1.5 billion, after hedges, in its mortgage-backed securities and loans this quarter, compared to $1.1 billion in the second three months of 2008.

The losses were proof to investors that the financial sector's problems appear to be nowhere near a resolution.

Meanwhile, Goldman Sachs Group Inc. fell after several analysts lowered their ratings and earnings estimates for the investment bank. And UBS AG, Switzerland's largest bank, reported further losses and write-downs of $5.1 billion during the second quarter.

The market's losses were mitigated for part of the session by a drop in the price of oil -- an illustration of the ongoing push-and-pull on Wall Street between oil prices and any news about financials. The erratic trading has led to a series of triple-digit moves up and down in the Dow in the past few weeks, including Tuesday's drop.

Oil trading was buffeted Tuesday by several factors: differing views on whether global demand is falling or rising, and word from BP PLC that it had shut down an oil pipeline that runs through Georgia as a precautionary measure due to the fighting between Georgian and Russian troops. Light, sweet crude settled down $1.44 at $113.01 a barrel on the New York Mercantile Exchange.

The price of crude has fallen more than $30 from its July 11 high of $147.27, easing concerns on Wall Street about inflation -- but on Tuesday, the anxiety over the financial sector overwhelmed any relief about oil prices.

"Some of the big bellwether financial-services companies are precipitating the correction that we're seeing," said Phil Orlando, chief equity market strategist at Federated Investors of Tuesday's retreat by stocks. Still, he said the run-up in stocks since oil began falling last month has made occasional retrenchments not unexpected.

The Dow fell 139.88, or 1.19 percent, to 11,642.47.

Broader stock indicators also declined. The Standard & Poor's 500 index fell 15.73, or 1.21 percent, to 1,289.59, and the Nasdaq composite index fell 9.34, or 0.38 percent, to 2,430.61.

Bond prices rose as stocks fell and investors, once again uneasy about the financial sector, when back in search of safer investments. In late trading, the yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.90 percent from 4.00 percent late Monday.

The dollar was higher against most other major currencies, while gold prices fell.

A Commerce Department report showed the nation's trade deficit shrank in June, rather than growing as expected. The trade imbalance dropped 4.1 percent to $56.8 billion in June from a revised May deficit of $59.2 billion, as exports rose to an all-time high. It was the smallest deficit in three months and was better than the $61.5 billion Wall Street expected.

Ryan Detrick, senior technical strategist at Schaeffer's Investment Research, said any good news of the day was simply overshadowed by the latest concerns about the financial services sector. Banks and brokerages have taken more than $300 billion of write-downs since the credit crisis began last year.

"The financial worries have just crept back in," Detrick said. "But, given the rally we had last week, we're still holding on if you look at the big picture. We were due for some kind of a break."

The Dow had gained 350 points over the previous two sessions.

JPMorgan fell $3.90, or 9.3 percent, to $37.99. The stock plunged in late trading after Ladenburg Thalman analyst Richard X. Bove lowered his earnings estimates for the year.

Goldman Sachs declined $11.21, or 6.3 percent, to $166.79 after the analyst downgrades of some of its ratings.

Wachovia Corp. fell $2.17, or 11.9 percent, to $16.04 after it announced plans to cut 600 more jobs than it previously expected as it tries to slash costs because of losses on mortgage debt. The bank also said in a quarterly regulatory filing that it has recorded an additional $500 million in legal reserves related to its settlement discussions with regulators concerning the sale of auction-rate securities.

UBS fell $1.34, or 6.2 percent, to $20.35. The company also said it will separate its divisions such as private banking and investment banking to bolster investor confidence.

Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where consolidated volume was virtually unchanged from Monday's 4.98 billion shares.

The Russell 2000 index of smaller companies fell 6.12, or 0.81 percent, to 744.94.

Overseas, Japan's Nikkei stock average fell 0.95 percent. Britain's FTSE 100 fell 0.13 percent, Germany's DAX index declined 0.36 percent and France's CAC-40 fell 0.44 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

[setravis]

Stocks decline following retail sales report
Wednesday August 13, 11:56 am ET
Stocks decline after weaker-than-expected retail sales report; oil prices advance


Wall Street tumbled for a second session Wednesday after a government report on retail sales and a jump in oil prices raised investors' concerns about consumers ability to spend and feed economic growth. The Dow Jones industrial average fell about 150 points, bringing its two-day decline to more than 300.


The Commerce Department said retail sales slipped 0.1 percent as rising prices helped offset the effect of economic stimulus payments to U.S. households. Excluding a big drop in sales of automobiles, retail sales rose 0.4 percent. But even on that basis it was the weakest showing in five months.

Wall Street had expected sales to remain flat after a minor increase in June. The report followed a warning from department store bellwether Macy's Inc. that its full-year profits would fall short of expectations because of slower sales.

The retail numbers pointed to a consumer who remains wary about spending. And because consumers' spending accounts for more than two-thirds of the economy, the fear on Wall Street is that the nation is in for a prolonged period of slow or even no growth.

"We're definitely in fear mode in the market. This is a classic correction," said Rob Lutts, president and chief investment officer at Cabot Money Management in Salem, Mass. "You're going to get this sort of fear activity when there's very little conviction."

An advance in oil prices also tinged investor sentiment. Light, sweet crude rose $1.89 to $114.90 a barrel on the New York Mercantile Exchange after the government said U.S. crude supplies fell unexpectedly last week.

In late morning trading, the Dow fell 159.90, or 1.37 percent, to 11,482.57 after losing just under 140 points on Tuesday.

Broader stock indicators also fell. The Standard & Poor's 500 index fell 11.79, or 0.91 percent, to 1,277.80. The technology-heavy Nasdaq composite index fell 16.11, or 0.66 percent, to 2,414.50. The Nasdaq's comparatively modest decline came after Applied Materials Inc. rose 81 cents, or 4.4 percent, to $19.28 in response to its earnings report late Tuesday.

On Tuesday, stocks fell sharply on news from JPMorgan Chase & Co. and other financial companies that reminded investors that the credit crisis is still hurting the economy.

Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.91 percent from 3.90 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices rose.

Investors appeared unfazed by a Commerce Department report that businesses added to their inventories in June at the fastest pace since January, a bigger gain than had been expected. Stockpiles on businesses' shelves and backlots grew by 0.7 percent in June, nearly double the 0.4 percent rise in May.

Companies' quarterly reports disappointed investors hoping for any signs that the economy, if not on the mend, might not be weakening.

Macy's fell 37 cents, or 2 percent, to $19.90 after reporting that its fiscal second-quarter earnings fell.

Deere & Co. fell $4.79, or 6.9 percent, to $64.56 after reporting weaker-than-expected profits. The maker of farm and heavy equipment said its third-quarter earnings rose 7 percent as growth in the global agricultural market aided results. The company earned $575.2 million, or $1.32 a share, compared with $537.2 million, or $1.18 a share, a year earlier.

Analysts surveyed by Thomson Reuters, on average, predicted earnings of $1.36 per share.

Overseas, Japan's Nikkei stock average fell 2.11 percent. In afternoon trading, Britain's FTSE 100 fell 1.29 percent, Germany's DAX index lost 2.45 percent, and France's CAC-40 fell 2.43 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

[setravis]

Wall Street ends mixed on credit concerns, oil
Friday August 15, 2008
Wall Street ends mixed as concerns over credit markets offset declining oil prices


Wall Street closed mixed Friday after playing out a now familiar scenario: Upbeat sentiment about falling oil prices flagged amid ongoing concerns about weak credit markets and the economy. The major indexes also turned in a mixed performance after another volatile week.


Investors were encouraged early in the session as oil's pullback lifted the outlook for consumer companies and eased concerns that record-high energy prices would force Americans to curb spending. Light, sweet crude dropped $1.24 to settle at $113.77 a barrel on the New York Mercantile Exchange, and earlier traded as low as $111.34, its lowest level in more than three months.

Oil fell on a growing sense that economies around the world are joining the U.S. in a slowdown. The rising dollar, which is gaining strength on economic concerns, contributed to the sell-off in crude and other commodities. Crude is down more than $35 from its July 11 record of $147.27; meanwhile, gold prices that swept past $1,000 an ounce earlier this year are now below $800.

While the decline in oil was placating investors this week, it still did not offset their ever-present anxiety over the slumping housing and credit markets. Concerns about more write-downs at investment banks continued, causing major market indexes to fluctuate over the course of the week; the Dow Jones industrials continued a volatile streak, dropping more than 100 points two days in a row amid intensifying fears about the health of the financial sector.

"With some of this sharp price collapse in commodities you would think the market would be up a lot more," said Greg Church, chief investment officer of Church Capital Management. "The underlying factor is that credit continues to appear to be very weak."

The Dow rose 43.97, or 0.38 percent, to 11,659.90.

Broader indexes were narrowly mixed. The Standard & Poor's 500 index rose 5.26, or 0.41 percent, to 1,298.20, while the Nasdaq composite index fell 1.15, or 0.05 percent, to 2,452.52.

Volume remained extremely light, exaggerating moves in the major indexes. On the New York Stock Exchange, advancing issues were relatively even with decliners; consolidated volume came to 3.99 billion, about even with Thursday.

For the week, the Dow finished down 0.63 percent and the S&P 500 rose a modest 0.15 percent. The tech-focused Nasdaq, however, logged its fifth-straight weekly gain by finishing up 1.59 percent; it has risen 8.5 percent since mid-July.

The market has been trying to sort through a number of different factors, including the price of oil and other commodities, ongoing concerns about the state of the credit markets and varying economic data. Investors seem to be grabbing on to any piece of news that might signal a turnaround for the economy.

The Nasdaq's performance this week indicates that investors are rotating back into technology stocks. However, the market has had little motivation to move into other sectors -- and analysts said many traders are simply buying into the dips.

The uncertainty in the market has increased demand for the safety of government debt, which rose modestly Friday. In late trading, the yield on the benchmark 10-year Treasury note, which moves opposite its price, slid to 3.84 percent from 3.90 percent late Thursday.

The dollar rose against other major currencies, contributing to Friday's pullback in oil and other commodities.

The day brought somewhat disappointing news about consumers. The University of Michigan reported a slightly smaller-than-expected rise in consumer sentiment in early August compared with July, evidence that the consumer remains under pressure.

Moreover, earnings outlooks from retailers J.C. Penney Co. and Abercrombie & Fitch Co. on Friday came in below forecasts.

"At the beginning of this year, earnings expectations started to drop precipitously, and the stock market dropped with them," said Scott Bleier, founder of market advisory service CreateCapital.com. "Those expectations got built into the stock market and to an excess. A lot of stocks discounted all of the bad news that was out there."

New York Attorney General Andrew Cuomo said Friday he plans to take legal action against Merrill Lynch & Co. as part of an ongoing investigation into the failure of the auction-rate securities market. Wachovia Corp., meanwhile, became the fifth bank in recent weeks to agree to repurchase billions of the investments as part of a settlement with regulators.

Merrill Lynch shares rose 4 cents to $26.33. Wachovia fell 24 cents, or 2.5 percent, to $15.57.

Airline stocks rose on the drop in oil. AMR Corp., the parent company of American Airlines, gained 46 cents, or 4.1 percent, to $11.74. However, shares of major oil companies declined, with ConocoPhillips down $1.71, or 2.1 percent, at $77.66.

The Russell 2000 index, which tracks small-cap stocks, fell 1.01, or 0.13 percent, to 753.37.

Overseas, Japan's Nikkei stock average rose 0.48 percent. Britain's FTSE 100 fell 0.66 percent, Germany's DAX index rose 0.06 percent, and France's CAC-40 rose 0.60 percent.

The Dow Jones industrial average ended the week down 74.42, or 0.63 percent, at 11,659.90. The Standard & Poor's 500 index finished up 1.88, or 0.15 percent, at 1,298.20. The Nasdaq composite index ended the week up 38.42, or 1.59 percent, at 2,452.52.

The Russell 2000 index finished the week up 19.07, or 2.60 percent, at 753.37.

The Dow Jones Wilshire 5000 Composite Index -- a free-float weighted index that measures 5,000 U.S. based companies -- ended Friday at 13,271.88, up 74.75 points, or 0.57 percent, for the week. A year ago, the index was at 14,531.52.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

[setravis]

Stocks jump on falling oil, inflation forecast
Friday August 22, 2008
Stocks jump as oil plunges, Bernanke indicates Fed won't likely raise interest rates soon


Wall Street capped a volatile week with sharp gains Friday as oil prices tumbled and after Federal Reserve Chairman Ben Bernanke said inflation pressures are likely to moderate. The Dow Jones industrial average rose nearly 200 points.


Speculation that Lehman Brothers Holdings Inc. could be sold helped buoy the financial sector and the overall market. Analysts warned this week that the investment bank could book large write-downs for bad debt. But reports Friday that Korea Development Bank is considering buying the company sent investors rushing for the stock. Lehman rose 69 cents, or 5 percent, to $14.41 but finished well off its highs of the session.

Investors also appeared cheered by an inflation forecast from Bernanke who said at the Kansas City Fed's annual economic symposium that inflation pressures should moderate this year amid tepid economic growth. But he also added that the inflation forecast remains "highly uncertain."

John Massey, senior portfolio manager at AIG SunAmerica Asset Management, said investors are encouraged by Bernanke's comments on interest rates and by the possibility of a buyer for Lehman.

"We're seeing the potential for maybe another white knight," he said, referring to prospects of a deal to acquire all or part of the investment bank.

The health of the financial sector and rising inflation are two of the market's greatest concerns. Although Bernanke refrained from making predictions about inflation, the market was mollified when light, sweet crude plunged $6.59 to settle at $114.59 a barrel on the New York Mercantile Exchange, after surging by more than $5 a barrel on Thursday.

The Dow rose 197.85, or 1.73 percent, to 11,628.06, near its highs of the session.

Broader stock indicators also rose. The Standard & Poor's 500 index rose 14.48, or 1.13 percent, to 1,292.20, and the Nasdaq composite index rose 34.33, or 1.44 percent, to 2,414.71.

The run-up Friday left stocks with mostly modest losses for the week that again saw a series of triple-digit moves in the Dow. The Dow is down 0.27 percent, the S&P 500 is off 0.46 percent and the technology-heavy Nasdaq is down 1.54 percent.

Bond prices pulled back as investors rushed from the safety of government debt to stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.87 percent from 3.83 percent late Wednesday.

The dollar rose against other major currencies, while gold prices fell.

Massey cautioned against making too much of the market's moves given the light volume this week. With traders squeezing in late-summer vacations, Wall Street has shown erratic trading. The Dow industrials lost more than 300 points over Monday and Tuesday before ending moderately higher Wednesday and finishing mixed Thursday.

"The light volumes are really sort of the reasons behind why you've got some outsize moves. I think the issues over all for the economy and the market are fairly well understood," he said. "The market is of this mind-set that we're going to continue to be flattish to down."

He doesn't expect the stock market to more accurately reflect investor sentiment until after Labor Day, when trading volumes should pick up. Until then, he'll be looking next week at readings on consumer confidence and unemployment to determine where the economy might be headed.

Remarks Friday from Bernanke and investor Warren Buffett appeared to dim Wall Street's hopes that mortgage financiers Fannie Mae and Freddie Mac might be able to get by without a government bailout. While such a move could help prop up the government-chartered companies, which together hold or back nearly half the nation's mortgage debt, it could also wipe out shareholder equity.

While Bernanke didn't mention them by name he said he said one of the critical questions facing the country is how to strengthen the financial system and guard against the "moral hazard" of companies making risky choices thinking that the government will ultimately offer a safety net.

Buffett said on CNBC that Fannie and Freddie are too big to fail but that shareholder equity in those companies can be lost.

Fannie Mae rose 15 cents to $5, while Freddie Mac fell 35 cents, or 11 percent, to $2.81.

Linda Duessel, the equity market strategist at Federated Investors, said the financial sector is key to a broader recovery on in stocks, which are down more than 10 percent this year.

"We need to absolutely find a bottom in financials to really believe that the bear can be behind us," she said, referring to the pullback in stocks since last fall.

While most sectors gained ground Friday, some materials companies pulled back as commodity prices fell. United States Steel Corp. fell $5.44, or 3.9 percent, to $133.76, while miner Freeport-McMoRan Copper & Gold Inc. declined $3.06, or 3.3 percent, to $90.60.

In corporate news, Gap Inc. rose 87 cents, or 4.6 percent, to $19.88 after reporting late Thursday that profits in the most recent quarter rose 51 percent from a year earlier, thanks to tight inventory and cost control.

King Pharmaceuticals Inc. said it is prepared to take its bid for Alpharma Inc. directly to shareholders after the company rejected King's $1.4 billion buyout overture. King disclosed the $33 a share offer publicly for the first time Friday. Alpharma surged $10.47, or 44 percent, to $34.51, while King rose 95 cents, or 8.5 percent, to $12.19.

Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange, where consolidated volume came to a light 3.62 billion shares compared with 3.94 billion shares traded Thursday.

The Russell 2000 index of smaller companies rose 12.35, or 1.70 percent, to 737.60.

Overseas, Japan's Nikkei stock average fell 0.68 percent. Britain's FTSE 100 rose 2.52 percent, Germany's DAX index rose 1.69 percent, and France's CAC-40 advanced 2.23 percent.

The Dow Jones industrial average ended the week down 31.84, 0.27 percent, at 11,628.06. The Standard & Poor's 500 index finished down 6.00, or 0.46 percent, at 1,292.20. The Nasdaq composite index ended the week down 37.81, or 1.54 percent, at 2,414.71.

The Russell 2000 index finished the week down 15.77, or 2.09 percent, at 737.60.

The Dow Jones Wilshire 5000 Composite Index -- a free-float weighted index that measures 5,000 U.S. based companies -- ended Friday at 13,185.26, down 86.62 points, or 0.65 percent, for the week. A year ago, the index was at 14,896.21.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

[setravis]

Stocks end lower on personal income data
Friday August 29, 2008
Stocks end lower as drop in personal incomes stirs concerns about consumers; Dell hurts techs


Wall Street tumbled Friday after the government said personal incomes fell last month by the largest amount in nearly three years while consumer spending slowed. The Dow Jones industrial average fell more than 170 points, while a disappointing profit report from computer maker Dell Inc. weighed on the technology-heavy Nasdaq composite index.


Meanwhile, investors charted the path of Hurricane Gustav as it heads toward the Gulf of Mexico and its oil rigs and refineries.

Wall Street's retreat following the downbeat news about consumers also comes after several days of sizable gains in stocks and on the final session before the long Labor Day weekend. Pre-holiday trading is generally light and some pullback was to be expected.

Still, investors were uneasy after the Commerce Department reported that personal incomes fell by 0.7 percent in July -- well beyond the drop of 0.1 percent that analysts polled by Thomson/IFR had predicted.

As expected, the government also said consumer spending rose a modest 0.2 percent. That was below the 0.6 percent increase seen in June and, accounting for rising prices, spending fell by 0.4 percent in July. Wall Street has been concerned about Americans' ability to help the economy grow, as high prices for gas and food have strapped many household budgets.

"My biggest concern with the income data is that we're getting off to a weak start to the third quarter," said Robert Dye, senior economist at PNC Financial Services Group. "The income numbers are a reminder that the economy is going to look worse before it gets better."

The Dow fell 171.63, or 1.47 percent, to 11,543.55. The blue chips began trading Friday having logged a three-day advance of nearly 330 points.

Broader stock indicators also lost ground. The Standard & Poor's 500 index fell 17.85, or 1.37 percent, to 1,282.83. The Nasdaq fell 44.12, or 1.83 percent, to 2,367.52.

The week's trading was again marked by volatility. After tumbling Monday on worries about the credit markets and finishing mixed Tuesday, stocks rose Wednesday and Thursday.

Those moves perhaps belied the quiet surrounding some trading posts. While readings on the overall economy as well as consumer confidence and demand for big-ticket manufactured goods were better than expected, trading was light all week. This prompted some observers to dismiss the market's moves as aberrations.

Declining issues outnumbered advancers Friday by nearly 2 to 1 on the New York Stock Exchange, where volume came to a weak 959.1 million shares compared with 956.2 million shares traded Thursday.

For the week, Dow fell 1 percent, the S&P 500 lost 1.18 percent and the Nasdaq fell 3.47 percent. And in August, the Dow rose 1.45 percent, the S&P 500 gained 1.22 percent and the Nasdaq added 1.80 percent.

Bond prices fell Friday. The 10-year note's yield, which moves opposite its price, rose to 3.83 percent from 3.79 percent late Thursday. The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude fell 13 cents to $115.46 per barrel on the New York Mercantile Exchange. While oil trading has been orderly as Gustav progresses, there is concern about damage from the storm or a disruption in the flow of gasoline and other fuel from Gulf Coast refineries.

Although many investors are fixated on consumers, Wall Street showed little reaction to the Reuters/University of Michigan's index of consumer sentiment, which rose to its highest level in five months. Economists often reason that consumers who are upbeat about their prospects are more likely to spend.

Also, investors shrugged off the Chicago Purchasing Managers' index, which measures business conditions across Illinois, Michigan and Indiana. It jumped to 57.9 from 50.8 in July. The index is considered a precursor to the Institute for Supply Management's manufacturing survey on Tuesday. Investors also will be looking next week to readings on the service sector, construction, factory orders and employment.

"Traditionally September is a weak month for stocks and I don't think we're going to escape that," said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners Inc., looking to the coming week. "I do think we are going to stay in a trading range. I don't see this market falling out of bed and going below the July lows."

But concerns that arose Friday could remain next week. Investors worried about the tech sector after Dell's report late Thursday and its cautious comments about spending in the sector. The stock fell $3.48, or 14 percent, to $21.73.

Another tech name, Marvell Technology Group Ltd., fell after its third-quarter revenue forecast fell short of Wall Street's estimate. The stock lost 65 cents, or 4.4 percent, to $14.11.

Government-chartered Fannie Mae and Freddie Mac fell anew Friday after big gains earlier in the week. Fannie Mae fell $1.11, or 14 percent, to $6.84, while Freddie Mac fell 77 cents, or 15 percent, to $4.51.

The Russell 2000 index of smaller companies fell 8.29, or 1.11 percent, to 739.50.

In Tokyo, the Nikkei index rose 2.39 percent. In Europe, London's FTSE-100 index rose 0.63 percent, Frankfurt's DAX rose 0.03 percent and the CAC-40 index in Paris rose 0.47 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

[setravis]

Stocks surge on report of entity for bad debt
Thursday September 18, 2008
Stocks end sharply higher on report that government will create entity to hold banks' debt


Wall Street rallied in a stunning late-session turnaround Thursday, shooting higher and hurtling the Dow Jones industrials up 400 points following a report that the federal government might create an entity to absorb banks' bad debt. The report also cooled investors' fervor for safe investments like government debt that were in demand for much of the day.


The report that Treasury Secretary Henry Paulson is considering the formation of a vehicle like the Resolution Trust Corp. that was set up during the savings and loan crisis of the late 1980s and early 1990s left previously solemn investors ebullient. Wall Street hoped a huge federal intervention could help financial institutions jettison bad mortgage debt and stop the drain on capital that has already taken down companies including Bear Stearns Cos. and Lehman Brothers Holdings Inc.

Worries about financial landmines on companies' books have essentially crippled parts of the world's financial markets in recent days and led to the intense volatility in the markets this week.

"It's going to take a lot of the bad debt off the balance sheets of these companies," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York, commenting on the possibilities of an entity akin to the RTC. It could alleviate many of the pressures causing the credit crisis, he said, and reopen moribund credit markets. But Fullman noted, "the devil's in the details."

"Bear markets are very sensitive to news. And on a scale of 1 to 10, this one is a 13," he said of the report.

The report from CNBC gave direction to a market that had weaved in and out of positive territory for much of the session as investors shuttled between the safety of Treasury bills and gold and the bargains posed by stocks that have been pounded lower.

The Dow soared 410.03, or 3.86 percent, to 11,019.69, surging 560 points from its low of the day, 10,459.44. It was the Dow's biggest percentage point gain since October 2002 but still leaves the index down about 400 for the week after routs Monday and Wednesday.

Broader stock indicators also jumped. The Standard & Poor's 500 index rose 50.12, or 4.33 percent, to 1,206.51, and the Nasdaq composite index advanced 100.25, or 4.78 percent, to 2,199.10.

The report of a broader government bailout proved more reassuring to investors than moves before Wall Street's opening bell Thursday by the Federal Reserve and other major central banks to inject as much as $180 billion into global money markets. The moves were an attempt to keep the credit crisis from worsening; the Fed added another $55 billion in overnight loans Thursday.

But it was only the prospect of a more comprehensive vehicle to sweep up bad debt that emboldened investors. Congress established the RTC in 1989 to buy $394 billion worth of real estate, mortgages and other assets of hundreds of failed savings-and-loan institutions. The corporation operated for several years disposing of the associations' assets, and then went out of business.

A repository for soured mortgage debt could help alleviate the grinding of the gears in the world's credit markets that have driven up the cost of borrowing for businesses; banks have become hesitant to make loans even to each other in recent days for fear of what institutions might be hobbled by soured debt. Investors are also contending with worries that more big-name financial companies could falter.

The Dow moved in and out of positive territory more than a dozen times, although there was little in the way of significant news to prompt the course changes. Investors who began the day feeling optimistic because of the money the Fed and other central banks added to the markets lost their resolve by late morning and gave back their gains.

But the CNBC report was the kind of catalyst for a comeback that has become rare on Wall Street in the past few months. When the market heard that there might be a fix for banks' bad debt problems, the Dow began rocketing higher. Some investors were pleased by the news while others raced to cover bets that stocks would fall, traders said.

Fear in the markets had led to speculation about the future of such major players as thrift bank Washington Mutual Inc. and investment bank Morgan Stanley. Media reports have been saying that Wells Fargo & Co. and Citigroup Inc. are interested in a possible takeover of Washington Mutual; and a person familiar with the negotiations said Morgan Stanley and Wachovia Corp. are in talks about a possible combination. He spoke on condition of anonymity because the talks are ongoing.

"We're seeing a tremendous amount of nervousness. That nervousness is leading to volatility," said Anthony Conroy, head trader for BNY ConvergEx Group. He said the markets hadn't seen as much fractiousness since the 1920s.

Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange, where consolidated volume came to an enormous 10.3 billion shares compared with 9.23 billion traded Wednesday. While volumes have been heavy all week, traders on Thursday were positioning themselves ahead of Friday's expiration of options contracts that can exacerbate volatility.

Investors shying from the risks of stocks turned to government-backed debt. On Wednesday, the 3-month Treasury bill -- considered one of the safest short-duration assets -- saw demand surge so high that its yield briefly dipped into negative territory for the first time since 1940. Investors have been so focused on parking their money in safe assets that they have been willing to take very little return on such investments.

The prices for short-duration Treasurys fell from Wednesday's levels. The yield on the 3-month T-bill was extremely low at 0.07 percent -- up slightly from 0.02 percent late Wednesday but well below its yield of 1.60 percent just a week ago.

Longer-term bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 3.53 percent from 3.42 percent late Wednesday.

Investors also continued a move into other safe havens, though demand eased somewhat as stocks soared. Gold rose again Thursday, up $46.50 to $897 an ounce on the New York Mercantile Exchange after posting its largest ever one-day price jump Wednesday. But it backtracked in after-market trading, responding to the CNBC report.

Oil shot up early in the day, moving back above $100 as investors sought it as another haven. But crude fell back with the market's realization that the financial turmoil will likely exacerbate the drop in demand that has taken oil down sharply from its July record of $147.27 a barrel.

Light, sweet crude on the Nymex rose 72 cents to settle at $97.88 a barrel.

Among financials, Morgan Stanley rose 80 cents, or 3.7 percent, to $22.55 as the investment bank sought a buyer or cash infusion to shore up its flagging share price. The stock has fallen sharply in the past week following Monday's bankruptcy filing at rival Lehman Brothers and a forced sale of Merrill Lynch & Co. to Bank of America Corp.

The Russell 2000 index of smaller companies rose 47.30, or 6.99 percent, to 723.68.

Overseas, Japan's Nikkei stock average dropped 2.22 percent to its lowest closing level in over three years. Hong Kong's Hang Seng index lost 0.03 percent. Britain's FTSE 100 fell 0.66 percent, Germany's DAX index rose 0.04 percent, and France's CAC-40 fell 1.06 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

[setravis]

AP
Word of possible financial crisis fix lifts stocks
Thursday September 18, 7:09 pm ET
By Patrick Rizzo, Jeannine Aversa and Martin Crutsinger, AP Business Writers 
Report of a possible government solution to financial crisis sends Dow up more than 400 points


WASHINGTON (AP) -- Wall Street finally found reason to rally Thursday, soaring on a report that the Bush administration was considering setting up a government agency to soak up bad loans and mortgages. But it was far from clear that the government had settled on any solution to the worst crisis on Wall Street in decades.


The Dow Jones industrial average rose 410 points, recording its biggest percentage gain in nearly six years and adding to a week of extraordinary volatility in the American financial system and markets.

The rebound also came after an infusion of billions of dollars by the Federal Reserve and world governments aimed at getting nervous banks to stop hoarding money and lend again.

Stocks had fluctuated throughout the day, without severe swings in either direction, until CNBC reported the administration might back a new agency to take bad assets off the books of struggling financial institutions.

But a person with knowledge of the talks told The Associated Press that the idea, patterned after the Resolution Trust Corp. set up in the aftermath of the savings and loan crisis of the 1980s, was just one idea on the table.

The person, speaking on condition of anonymity because of the sensitivity of the discussions, said the talks had not narrowed to a single option, and that the RTC-style solution was not a certainty. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke were scheduled to meet with key congressional leaders late Thursday night.

Before the sun rose on Wall Street, the Fed said it would boost by as much as $180 billion the amount of cash it would supply to foreign counterparts that are short on dollars. For banks in the United States, the Fed supplied $105 billion in short-term loans later in the day.

But, at least initially, those efforts did little to unfreeze the global credit markets. Banks remained extremely reluctant to lend money.

The No. 2 official at the International Monetary Fund, John Lipsky, said the past few days were "searing manifestations of a financial crisis that has expanded to historic proportions." He predicted the turbulence would continue for "some time to come."

British financial regulators also banned short-selling the stock of financial companies listed on the London Stock Exchange. U.S. regulators tightened rules on short-selling Wednesday.

The Fed said it had authorized the expansion of swap lines, the process by which it supplies reserves to other central banks, to include amounts up to $110 billion for the European Central Bank and up to $27 billion for the Swiss National Bank.

The Fed also said new swap facilities had been authorized with the Bank of Japan for as much as $60 billion, $40 billion for the Bank of England and $10 billion for the Bank of Canada.

For more than a year, investors around the world have watched with growing alarm as the U.S. economy, the world's largest, has struggled to right itself amid massive home foreclosures, many of them from mortgages issued to homeowners with bad credit.

The turmoil has swallowed some of the most storied names on Wall Street. Three of its five major investment banks -- Bear Stearns, Lehman Brothers and Merrill Lynch -- have either gone out of business or been driven into the arms of another bank.

The Dow's gain of nearly 4 percent on Thursday sent the average back above 11,000 and nearly erased its losses from a day before.

But as the uncertainty wore on, investors continued to flock to Treasury securities, considered a haven in times of crisis, and the price of gold rose yet again. And worries about even the safest investments intensified as Putnam Investments abruptly closed a $15 billion money market fund because institutional investors had pulled their cash.

President Bush canceled out-of-town fundraising trips to Alabama and Florida to stay in Washington and huddle with Paulson and the heads of the Fed and the Securities and Exchange Commission.

In an appearance earlier in the day, the president acknowledged "serious challenges" in the markets and said: "The American people can be sure we will continue to act to strengthen and stabilize our financial markets and improve investor confidence."

The credit troubles reverberated around the globe. Asian stocks closed lower. European stocks rose but struggled to hold on to the gains. Russia closed its stock exchanges for a second day, and President Dmitry Medvedev pledged a $20 billion injection into financial markets.

In the United States, investors worried for another day about the health of the banks still standing. Earlier in the week, venerable Lehman Brothers was forced into bankruptcy, and Merrill Lynch was driven into the arms of Bank of America.

On Thursday, Morgan Stanley scrambled to strike a major deal or raise more cash that will reassure investors and prevent more damage to its battered stock. Its CEO, John Mack, reached out to China's Citic Group overnight about a possible investment, according to a person familiar with the talks.

Morgan Stanley is also considering a combination with retail bank Wachovia Corp. and an investment from Singapore Investment Corp., one of the world's biggest sovereign wealth funds, said the person, who spoke on the condition of anonymity because the discussions were still ongoing.

On Capitol Hill, lawmakers in both parties became increasingly vocal about their concerns with the Bush administration's handling of the current crisis.

Administration officials refused to attend a closed-door briefing with House Republicans this morning, leaving their congressional allies in the dark about the government's $85 billion emergency loan to insurer American International Group, House GOP leader John A. Boehner said.

And Sen. Chris Dodd, D-Conn., the Banking Committee chairman, was irritated that Paulson twice canceled appearances he was to have made before the panel this week.

[setravis]

AP
AP source: US weighing financial crisis plans
Thursday September 18, 7:04 pm ET
By Jeannine Aversa, AP Economics Writer 
AP source: Bush administration weighing plans aimed at easing current financial crisis


The government is weighing several options to ease Wall Street's worst financial crisis in decades, according to a person with knowledge of the talks. But taking over banks' bad debt, an idea that rallied the stock market on Thursday, is no certainty.


Stocks surged late in the afternoon after a report that the administration was considering creating a government entity patterned after the Resolution Trust Corp. created in the 1980s in the aftermath of the savings and loan crisis.

But the official, speaking on condition of anonymity because of the sensitivity of the discussions, said the talks have not narrowed to a single option.

President Bush canceled an out-of-town trip Thursday to stay in Washington and meet with his top economic advisers.

Bush held a 40-minute meeting with Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and Securities and Exchange Commission chief Christopher Cox along with White House and Treasury Department aides.

Congressional leaders were told they would get a briefing at 7 p.m. from Paulson, Cox and Bernanke, Majority Leader Steny Hoyer, D-Md., told the AP.

House Speaker Nancy Pelosi, D-Calif., wrote to Bush saying Congress would meet beyond its planned Sept. 26 adjournment, if necessary, "to consider legislative proposals and conduct necessary investigations" related to the financial crisis.

"We stand ready to work with you and your administration to consider constructive solutions that stabilize our financial markets and balance accountability to the U.S. taxpayer with protecting American families from the crisis' fallout," Pelosi wrote.

Rep. Barney Frank, D-Mass., said "the timetable has been greatly sped up" for Congress to consider ways of dealing with the financial meltdown. Asked whether a hearing he's planning next week on broad government intervention to address the crisis could morph into a legislative drafting session, Frank did not reject the suggestion.

Sen. Chuck Schumer, D-N.Y., would not comment on reports that Paulson was considering creating an RTC-like entity, but he said: "Everyone realizes this ad hoc situation can't last and we need a comprehensive plan. ... I think the administration knows that."

Schumer presented his own proposal for federal intervention, in which the government would lend struggling banks money in exchange for an equity stake. He said it would be conditioned on the banks agreeing to legislation that would let homeowners who have declared bankruptcy renegotiate their mortgages so they could keep their homes.

The New York senator, an outspoken advocate for the financial industry, said his idea was a better alternative to an RTC-like entity, which could find it difficult or impossible to sell off complex mortgage-related investments.

Separately, two days after declaring no more bailouts, Republican presidential nominee John McCain called for a Resolution Trust Corp.-type entity that could "provide an orderly process through which to identify bad loans and eventually sell them."

[setravis]

AP
Stocks fall as rate cut enthusiasm wanes
Wednesday December 17, 12:10 pm ET 
Wall Street pulls back as economic worries, Morgan Stanley loss dampen rate cut zeal


NEW YORK (AP) -- Wall Street reined in its enthusiasm over the Federal Reserve's rate cut Wednesday, sending stock prices moderately lower as more downbeat corporate news offered a fresh reminder of the nation's economic troubles.


Still, the price decline was not surprising given that the Dow Jones industrial average rose more than 4 percent on Tuesday while other indexes gained more than 5 percent, after the federal funds rate target was lowered to a range of zero to 0.25 percent -- the lowest levels on record.

"This is a whole lot of new information for people to digest," said David Waddell, senior investment strategist and chief executive of Waddell & Associates. "Now we need time to sit back ... and figure out what it all means."

Meanwhile, a larger-than-expected loss from Morgan Stanley offered the latest evidence of the large obstacles the battered financial industry still faces. The company posted a loss of $2.37 billion, or $2.34 per share, for the fiscal fourth quarter. The report comes a day after rival Goldman Sachs Group Inc. posted its first quarterly loss since going public in 1999.

Some investors also likely worried that the Fed's sharp rate cut, which was more than analysts had expected, is a sign of how dire the global financial crisis and economic troubles really are.

The Fed's move was an unprecedented one aimed at boosting borrowing and lending. The central bank said Tuesday it anticipates the weak economy will keep the target rate low for "some time," and added that it is mulling the possibility of buying Treasurys -- in effect, printing new money. On Wednesday, yields on 10-year Treasury notes and 30-year Treasury bonds fell yet again to record lows.

In midday trading, the Dow Jones industrial average fell 79.01, or 0.89 percent, to 8,845.13.

Broader stock indicators also declined. The Standard & Poor's 500 index fell 8.71, or 0.95 percent, to 904.47, and the Nasdaq composite index fell 15.13, or 0.95 percent, to 1,574.76.

The Russell 2000 index of smaller companies was down 3.28, or 0.68 percent, to 479.57.

Declining issues outnumbered advancers by about 4 to 3 on the New York Stock Exchange, where volume came to a light 436.65 million shares.

Volume is expected to remain light for the remainder of the year as investors break for the holidays. Light volume tends to skew the market's movements.

"The lack of people trading is going to increase volatility," said Uri Landesman, head of global growth at ING Investment Management Americas.

Despite Wednesday's decline, investors have been rather resilient in recent trading sessions, leading some to believe that the market might be entering a period of stability after the unrelenting selling of the past three months.

"Even if the market is down 100 points, the fact that it's been in a narrow trading range I think is very positive," Waddell said.

"I think on balance, we're going to see the equity market trying through this difficult period to price in what things will look like in the second half of 2009," said Michael Strauss, chief economist at Commonfund.

In other news, Securities and Exchange Commission Chairman Christopher Cox blamed regulators for a decade-long failure to investigate Wall Street money manager Bernard L. Madoff, who is accused of running a $50 billion Ponzi scheme. Cox said staff attorneys never bothered to seek a formal commission-approved investigation that would have forced Madoff to surrender vital information under subpoena.

In response to the Fed's interest rate cut, most banks lowered their prime rate, or the rate they charge their best customers, to 3.25 percent from 4 percent -- the lowest it's been in more than 50 years. The move is expected to lower rates on everything from home equity loans to credit card loans. Mortgage rates are also expected to fall after the Fed renewed its pledge to buy up billions of dollars of mortgage debt.

These moves could put billions of dollars into the pockets of consumers at a time when many Americans have lost the will to spend amid a worsening recession.

But many experts believe that the interest rate cuts alone won't be enough to spur spending.

"It's a tall order to get them to go out and spend again," said Joseph LaVorgna, chief U.S. economist at Deutsche Bank. "That's why you also need a stimulus."

Bond prices extended their sharp advances Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.11 percent from 2.28 percent late Tuesday. The yield on the popular three-month T-bill -- whose yield has at times gone negative due to frenzied buying -- was at 0.01 percent down from 0.03 percent late Tuesday.

The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude fell $2.80 to $40.80 a barrel on the New York Mercantile Exchange.

The recent decline in oil prices is helping to lower the U.S. current account trade deficit -- the amount of money the country is borrowing from foreigners. The Commerce Department said Wednesday the current account trade deficit fell by 3.7 percent to $174.1 billion in the July-September quarter. That was a better showing than the $178.8 billion deficit economists expected.

Overseas, Japan's Nikkei stock average rose 0.52 percent, while Hong Kong's Hang Seng index rose 2.18 percent. In afternoon trading, Britain's FTSE 100 fell 0.51 percent, Germany's DAX index fell 0.50 percent, and France's CAC-40 fell 0.30 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

[setravis]

AP
Stocks rise as service sector data top forecast
Wednesday February 4, 11:07 am ET
By Madlen Read and Tim Paradis, AP Business Writer 
Stocks rise as service sector data top forecast; Street examines government stimulus, earnings


NEW YORK (AP) -- Investors grew more confident Wednesday after a better-than-expected reading on the service industry offered the latest sign that the economy could be starting to mend some of its wounds.


After a quiet opening, stocks gained momentum after the Institute for Supply Management said the nation's service sector shrank in January at a slower pace than in December. Still, it was the fourth straight month that business activity in the industry contracted.

The trade association of purchasing executives said its index rose to 42.9 in January from a revised level of 40.1 in December. Analysts had expected a reading of 39, according to a survey by Thomson Reuters. The ISM's report on the manufacturing sector, issued Monday, similarly came in above expectations even as it signaled continuing weakness.

The service data came as investors juggled several disappointing earnings reports with hopes that Washington would soon show further progress on its efforts to revive the economy. The Senate is getting closer to passing a $900 billion stimulus plan. Senators recently added money to the bill for medical research and tax breaks for car purchases. A similar plan has already cleared the House.

Not all the news was upbeat. Weaker-than-expected fourth-quarter numbers from Kraft Foods Inc., Walt Disney Co. and Time Warner Inc. provided the latest reminder of the economy's struggles.

"The drivers this week are less corporate earnings, and more what we're hearing out of Washington, D.C.," said Arthur Hogan, chief market analyst at Jefferies & Co.

The administration also seems closer to figuring out a plan for the nation's ailing financial industry, he added. "There's a lot of buzz about a rescue plan and a fiscal stimulus plan that are proving to be market friendly," Hogan said.

In late morning trading, the Dow Jones industrial average rose 45.00, or 0.56 percent, to 8,123.36.

Broader indicators also rose. The Standard & Poor's 500 index rose 9.41, or 1.12 percent, to 847.92, and the Nasdaq composite index rose 27.55, or 1.82 percent, to 1,543.85.

The Russell 2000 index of smaller companies rose 6.37, or 1.41 percent, to 459.27.

Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange, where volume came to 303.2 million shares.

Trading has been erratic in recent days. Investors coming off the market's worst January ever have been searching for bargains among battered stocks and looking for signs the economy might be bottoming out. The stock market finished Tuesday with a gain, sending the major indexes up more than 1 percent, thanks to reassuring data about pending home sales and better-than-expected earnings reports from companies like drugmakers.

Bond prices were mixed Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.92 percent from 2.88 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, dipped to 0.30 percent from 0.32 percent.

On Tuesday, the three-month yield rose to its highest level since December. The increase indicated some investors were backing out of the safest parts of the market and moving into riskier but higher-yielding areas like corporate debt. Demand is still high for government debt but well off the panicked levels seen in the fall.

The Treasury Department said Wednesday it is bringing back the seven-year note and doubling the number of its 30-year bond auctions as it tries to handle a surging budget deficit projected to top $1 trillion this year.

The dollar was mixed against other major currencies. Gold prices rose.

Light, sweet crude rose 21 cents to $40.99 a barrel on the New York Mercantile Exchange.

The latest batch of corporate profit reports reined in some of the market's enthusiasm over the service industry report. Kraft posted a fourth-quarter profit drop of 72 percent, as revenue from the Velveeta, Oreo cookies and Maxwell House coffee businesses could not make up for high restructuring costs. The stock fell $2.28, or 7.9 percent, to $26.46.

The media industry posted several downbeat reports as well. Disney said late Tuesday its fourth-quarter earnings fell 32 percent. Time Warner reported a fourth-quarter loss of $16 billion after the conglomerate wrote down the value of its cable, publishing and AOL assets.

Disney fell $1.05, or 5.1 percent, to $19.57, while Time Warner slipped 13 cents, or 1.3 percent, to $9.65.

Overseas, Japan's Nikkei stock average rose 2.73 percent. In afternoon trading, Britain's FTSE 100 rose 2.02 percent, Germany's DAX index rose 3.26 percent, and France's CAC-40 rose 3.37 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com