Archive for January, 2009

Wall Street starts new year with strong rally (Reuters)

Friday, January 2nd, 2009 | Finance News

NEW YORK (Reuters) –
U.S. stocks started the new year with a big jump on Friday as investors looked beyond yet another piece of grim economic data on hopes that a recovery is on the horizon after a disastrous 2008.

Analysts said investors seemed to be discounting economic data, including Friday's release showing a sharp contraction in factory activity, in anticipation of a turnaround in the second half of 2009.

Those expectations helped push indexes to their highest levels since early November, although volumes were light with trade wedged between Thursday's New Year's holiday and the weekend.

"The market is always discounting where it will be six to nine months out," said Peter Jankovskis, director of research at OakBrook Investments LLC in Lisle, Illinois. "We're getting close to the point if people believe that things are getting better it will be reflected shortly in the market.

The Dow Jones industrial average (.DJI) rose 252.81 points, or 2.88 percent, to 9,029.20. The Standard & Poor's 500 Index (.SPX) jumped 27.83 points, or 3.08 percent, to 931.08. The Nasdaq Composite Index (.IXIC) gained 55.18 points, or 3.50 percent, to 1,632.21.

Analysts cautioned the light volume could have exacerbated swings in the market.

Markets shrugged off a report by the Institute for Supply Management that said U.S. factory activity fell to a 28-year low in December, showing a more severe contraction than economists had expected.

Chevron (CVX.N) was among the top boosts to the Dow as oil prices rose above $46 a barrel amid tensions between Russia and Ukraine and violence in the Middle East. Delays in Gulf Coast tankers due to fog also lifted oil prices.

Shares of Chevron rose 3.5 percent to $76.52, while Exxon Mobil (XOM.N) gained 2.3 percent to $81.64. The S&P Energy index (.GSPE) climbed 4.3 percent.

Big-cap tech stocks, including Apple Inc (AAPL.O) and Microsoft Corp (MSFT.O), which are seen as better positioned to withstand a weak economy due to large cash reserves, helped lift the Nasdaq.

Shares of iPod maker Apple rose 6.3 percent to $90.75 while Microsoft added 4.6 percent to $20.33.

Consumer discretionary stocks rose after Starwood Hotels (HOT.N) signed a confidentiality agreement with property magnate Sam Zell's Equity Group Investments LLC, which could be in preparation for Zell acquiring a larger stake in the company.

Starwood shares surged over 16 percent to $20.80 while the S&P Consumer Discretionary index (.GSPD) gained 4.7 percent.

The S&P Industrials index (.GSPI) rose 4.2 percent, as Textron (TXT.N) rose 10.8 percent to $15.37 and Manitowoc (MTW.N) gained 9.6 percent to $9.49.

Analysts also said investors were watching for clues of how President-elect Barack Obama will try to shake the U.S. economy out of its worst slump in decades.

Obama is due to meet leaders in Congress on Monday to discuss his stimulus plan.

Some Republicans are worried that their Democratic rivals could expand the plan to as much as $1 trillion.

General Motors Corp (GM.N) shares jumped 14 percent to $3.65 after the U.S. government on Wednesday paid out the first $4 billion in emergency loans to support the biggest U.S. carmaker. A parallel rescue payment for privately held Chrysler LLC was on hold until the new year.

Chrysler said it remained in talks with the U.S. Treasury to finalize its own $4 billion loan agreement and expected to receive its share of the funding soon.

Shares of Ford Motor Co (F.N) rose 7.4 percent to $2.46 even after it forecast a sharp drop in industry-wide U.S. auto sales for December.

Volume was slim on the New York Stock Exchange, where about 929 million shares changed hands, far below last year's estimated daily average of 1.90 billion. On the Nasdaq, about 1.44 billion shares traded, well below last year's daily average of 2.17 billion.

Advancers outnumbered decliners on the New York Stock Exchange by a ratio of about 9 to 2, while on the Nasdaq about eight stocks rose for every three that fell.

(Editing by Leslie Adler)

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World stocks cheer in new year after horrible 2008 (AFP)

Friday, January 2nd, 2009 | Finance News

NEW YORK (AFP) –
Global stocks skyrocketed on Friday in the first trading day of 2009 amid investor hopes for a brighter year ahead after a horrendous 2008 that hacked down stock markets around the world.

On Wall Street, stocks staged a powerful rally as investors bet on US president-elect Barack Obama's massive plans to revive the world's biggest economy, stuck in recession for the past year.

The Dow Jones Industrial Average surged 258.30 points (2.94 percent) to finish at 9,034.69.

The tech-studded Nasdaq leapt 55.18 points (3.50 percent) to 1,632.21 and the broad-market Standard & Poor's 500 index advanced 28.55 points (3.16 percent) to 931.80.

"The market awaits details of a fiscal stimulus plan to be offered by the Obama administration," said Al Goldman, analyst at Wachovia Securities.

Obama, who takes office on January 20, has already pledged stepped-up efforts to revive the moribund economy in the face of the worst global financial crisis since the Great Depression.

Before the New Year holiday Thursday, Wall Street had closed 2008 with a two-day rally that failed to ease the blow of horrific full-year losses.

The blue-chip Dow gained 1.25 percent Wednesday but ended the year with a loss of 33.84 percent, the worst since 1931. The S&P 500 also had its most dismal annual performance in 77 years and the Nasdaq posted a record loss.

"Hope for much better returns in 2009 has permeated the marketplace," said Patrick O'Hare, an analyst at Briefing.com.

"Unless there is a sea-change in sentiment over the course of the next two trading sessions, it looks as if we'll be able to say there was indeed a Santa Claus rally."

In Europe, the Paris CAC 40 index shot up 4.09 percent, the Frankfurt Dax soared 3.39 percent and the FTSE 100 in London rose 2.88 percent.

The three key markets had shed between 31 percent and 43 percent in 2008.

"The mindset may be that the turmoil of 2008 is now behind us and that 2009, although not set to be great, needs to start with a bang," said CMC Markets trader Jimmy Yates.

Elsewhere in Europe, Belgian stocks were up 3.78 percent, Spain rose 3.16 percent, Italy was up 2.79 percent, while Amsterdam rocketed up 5.00 percent.

Friday's rally was an extension of the uptick in global stock markets ahead of the New Year's holiday earlier this week.

Dendra Lambert, analyst at Hilliard Lyons, said a two-day rally to close out the year was a positive sign.

"After experiencing the worst losses since the Great Depression, some onlookers believe bargain hunters were starting to emerge in the final days of trading of 2008," she said.

Reykjavik suffered the biggest loss of any stock market in 2008, with the Icelandic bourse diving 94 percent in value. It was followed by Moscow, which plunged 72.5 percent and Dubai which shed 72 percent.

However, many investors and experts expect 2009 will be an even worse than last year.

"As we enter 2009, the US and global economies are in steep decline, in what is the most severe synchronized global downturn of recent times," said Nigel Gault, chief US economist at IHS Global Insight.

"We are not looking for signs of recovery yet, merely for signs that the rate of decline is becoming less severe -- but cannot find them."

Others were decidedly more upbeat. David Kotok of Cumberland Advisors said the outlook is positive.

"We expect the central banks and governments of the world to continue aggressive monetary and fiscal stimulus. We anticipate credit markets will improve in 2009," he said.

The new year cheer was contagious. In Latin America, Brazil's Bovespa shot up 7.17 percent, Mexico's main index gained 3.89 percent and Argentina jumped 5.89 percent.

Earlier Friday in Asia, Hong Kong soared 4.6 percent and Seoul added 2.93 percent.

The Tokyo market remained closed until Monday for extended new year holidays. Last Monday the bourse ended the year down 42.12 percent from 2007, its worst-ever annual percentage fall.

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FDIC says it will sell IndyMac (Reuters)

Friday, January 2nd, 2009 | Finance News

(Reuters) –
The Federal Deposit Insurance Corp, in a statement on its Website, says it signed a letter of intent to sell Indymac Federal bank operations to thrift holding company controlled by IMB Management Holdings LP.

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