US stocks ticked higher on Wednesday after a deal was reached on an economic-stimulus package, though some energy and commodity stocks were weak as economic reports underscored the need for stimulus.
The International Energy Agency said US oil demand in December slid more than 6%, hurting the price of oil. Also Wednesday, markets digested reports showing that imports to and exports from both China and the US – the twin engines of the global economy – fell sharply. Stocks dipped midsession, but bounced after Sen. Harry Reid, Democrat of Nevada said Wednesday that a deal had been reached on a $789bn economic stimulus bill, adding that the Senate could vote on as soon as Thursday.
The Dow Jones Industrial Average, which slid 382 points in the previous session due largely to uncertainty about the Treasury Department’s unveiling of a rough plan to buy toxic credit bets from banks, was up 50.65 points (0.64%) to 7,939.53.
Banks regained some of their Tuesday losses even as executives were put on the hot seat in Congress: Bank of America was up 7.7% to $5.99 and Citigroup was up 7.5% to $3.60. The S&P 500 rose 6.58 points (0.80%) 833.74.
Bank stocks have plummeted since late last year despite a series of major steps by federal officials, with traders seemingly uneasy about anything that comes out of Washington.
While credit markets have improved from their late-2008 unprecedented freezing, equities are only narrowly higher than their low points of that year. Increasingly it appears equity investors are getting out of stocks completely and cautiously pushing into other asset classes with any funds they take from the sidelines.
Among other asset classes, Treasuries and gold futures were rallying and the dollar was gaining against the euro.
The NASDAQ ended 5.77 points (0.38%) higher at 1,530.50, though it was hurt by an 18% fall to $46.88 for shares of BlackBerry maker Research In Motion, which had been one of the tech stocks that held up best through the market’s downdraft in recent months.
Also hurting the Nasdaq was a slide for transportation stocks including airlines, truckers and even railroad companies. Among the biggest decliners was JB Hunt, down 6.6% to $22.79. While a rise in oil prices played a role in the weakness, a flood of notes have come in from analysts in recent weakness disparaging many in the transportation sector.
In economic news, Treasury Secretary Timothy Geithner told a Senate panel that the US financial system faces unprecedented challenges that require new and aggressive programs to help solve the ongoing crisis.

Read more »

Continued safe-haven demand amid worries about the global economy and financial sector underpinned gold futures, although the market remained within its recent trading range. Spot gold was last quoted at $858.95. Comex gold futures strengthened $8.70 (1.02%) to $858.80. Spot silver was last quoted at $11.41.
West Texas Intermediate was last quoted at US$42.27 per barrel.

Base metals continued to slide Thursday, as worse-than-expected US housing and jobs data weakened sentiment on demand for industrial metals.

Base metals on the LME finished mixed. Aluminium fell $8 (0.60%) to $1,335 while copper weakened $145 (4.46%) to $3,105 and nickel rose $125 (1.15%) to $10,975. Zinc dropped $20 (1.74%) to $1,130 and lead shed $18 (1.64%) to $1,053. Comex copper was last quoted at 138.10 US cents per pound.

US Stocks Retreat as Banking System Remains Under Fire
US stocks traded lower late Thursday as an afternoon bounce collapsed under the weight of more dire concern about the banking system and its impact on the overall economy.

Setting the tone in a volatile trading session continued to be the banking sector as insurers and regional banks were hit hard by concerns about their profits, while larger Wall Street bellwethers suffered from continued speculation there might be even more government oversight and directives from the incoming Obama administration.

The Dow Jones Industrial Average weakened 105.3 points (1.28%) to 8,122.8 as a morning release of job cuts and lower second-quarter earnings from bellwether Microsoft continued to weigh on the index. Read more »

Bank of America Worries Loom

US stocks popped into the green Thursday afternoon as traders used the psychologically significant level of 8,000 for the Dow Jones Industrial Average as an entry point, though investors still fretted about Bank of America’s capital needs.

The Dow Jones Industrial Average climbed 12.4 points (0.15%) to 8,212.5.

Shares of BofA were down by 18% at $8.38, off their low at $7.35 after a report that the largest US bank by assets could require government assistance to absorb losses from its Merrill Lynch acquisition. Shares of the bank pared their losses after a report that the US might guarantee $100bn to $200bn for BofA. Citigroup, which rushed into the sale of a controlling stake in its brokerage recently to raise capital, was off 19%.

The Dow hit its low for the session around 12:40 EST, off more than 200 points at 7,995, with the move marking its first intraday trek below 8,000 since Nov. 21. The Dow recorded its low of the current bear market on Nov. 20, when it closed at 7,552.

The Standard and Poor’s S&P500 increased 1.1 points (0.13%) to 843.7.

The financial sector remained the fulcrum of a volatile market, leading moves up and down.

From an earnings standpoint, JPMorgan shed 17 cents to $25.74 after posting a profit of 7 cents a share for the fourth quarter. Earnings fell 76% from a year ago and Chief Executive Jamie Dimon said loan demand “is dropping rather dramatically.”

Many veteran traders and analysts believe the market is likely to test its lows in the coming weeks, though there is some disagreement over whether the old lows will hold, considering the continuing flurry of fourth-quarter profit reports that are likely to contain more nasty surprises.

The Nasdaq rose 22.2 points (1.49%) to 1,511.8 though it was hurt by a 3% drop in Apple on worry about the health of CEO Steve Jobs. He had said late Wednesday he would take a medical leave from the company.

Commodity prices fell, hurting the energy and industrial sectors. As demand in economies worldwide seems to weaken with each data point, markets are pricing in a “deflationary” phase, where the prices of all assets decline, reducing incentive for investment and trade.

For Australian ADRs listed on the NYSE, BHP Billiton firmed $1.23 (3.19%) to US$39.78, Rio Tinto Plc added $3.42 (4.12%) to US$86.42, ResMed advanced 26 cents (0.68%) to US$38.36, Telstra Corporation improved 20 cents (1.67%) to US$12.20, Telecom Corporation of NZ dropped 18 cents (2.74%) to US$6.38 and Westpac climbed 14 cents (0.26%) to US$53.95.

In economic news, US producer prices fell last year for the first time since 2001, while the number of idled workers filing new claims for jobless benefits in the last week resumed an upward trend. One piece of news not as bad as feared, Read more »

The DOW falls below 9000 for the first time in 5 years! Where to next … that is a trillion dollar question on everyone mind I’m sure! Frankly we’re seeing the capitalist towers falling down, not slowly rotting away unchecked like over the last decade. Funny that, as a capitalist system cannot work without CAPITALs, and this is the dilema Wall Street found itself in.

• Dow Jones 8579 -679 -7.33%
• S&P 500 910 -75 -7.62%
• NASDAQ 1645 -95 -5.47%

The Dow Jones Industrial Average lost almost 679 points, for its the worst seven-session performance since the one that ended Oct. 26, 1987.

For Thursday’s session, the Dow Jones Industrial Average slid 678.91 points (7.33%) to 8,579.19, its lowest close in more than five years and comparable to the 777-point decline of Sept. 29, the biggest point-decline of its history.

Trade was volatile again, with the Dow up more than 150 points at one stage.The Standard & Poor’s 500 fell 75.02 points (7.62%) to 909.92. Both the S&P 500 and the Dow are off by more than 20% for October, comparable to the stock-market declines of October 1929 and October 1987.

The Nasdaq Composite shed 95.21 points (5.47%) to 1,645.12.

Fear indicators, such as the Chicago Board Options Exchange volatility index, hit all-time highs. The VIX is known as the market’s “fear gauge” because traders pay up for protection when nerves are jangled.

These falls came on the one-year anniversary of the highs of the Dow and the S&P 500. The Dow has lost 5,585 points, or 39.4%, since closing at 14,198 on Oct. 9, 2007. The S&P 500, meanwhile, is off 655 points, or 41.9%, since recording its high of 1,565.15.

In so far, the market had surpassed all previous falls bar the 1929 stock market crash.

Back then the DOW total lost was 77.9% which started on Oct 24th 1929 and ended on Aug 12th 1932. That was almost 3 years of pains and America had to endure a decade of depression. How will America, and in fact the world fair this time around? If we take 1929 crash as a point of reference then there are still be more of the same to come just yet! Braise yourself for the ride! We are not even half way through October yet.

It sure is measuring up to the past crashes in pass century and given all the massive negative press and reporting that the sky is about to fall. This crash will go down in history as hugely monstreous!

Not even a coordinated barrage of rate cuts could prevent the stock market crash of October 2008 measuring up to those of October 1987 and 1929.
US stocks slid late in the session Wednesday, weighed down by continued tightness in credit markets, the need for capital at financial firms like Bank of America and a disappointing kickoff to the earnings season from Alcoa.
The Dow Jones Industrial Average fell 189.01 points (2%) to 9,258.10, its sixth straight decline and its lowest close since Aug. 11, 2003, more than five years ago.
For the week so far, the Dow is down 10%, on top of a 7.3% loss last week. By comparison, in the worst week of the 1929 crash, the week ended Oct. 19 that year, the Dow took a loss of 8.2%; the blue-chip index lost 13% on the week that started with Black Monday, Oct. 19, 1987. So far in October, the Dow is off 15%, compared with a loss of 20% in October 1929 and a loss of 23% in October 1987.
The broad Standard & Poor’s 500 fell 11.29 (1.13%) to 984.94, its lowest finish since Aug. 13, 2003. As of Tuesday, the S&P 500 had wiped out about $1.48tr in wealth during October, according to S&P.The technology-heavy Nasdaq Composite fell 14.55 (0.83%) to 1,740.33, also its lowest since August 2003.

Don’t believe in everything you read in the press. This perhaps could turn out to be an opportunity of a life time for many people (and not the mass). Take a look at all this from a different perspective. A “blessing in disguise” is the phrase I’d be inspired to in time of extreme crisis. If anything, at least we still have time on our side. Well, most of us anyway, and certainly I.

Let me now spell out how the new paradigm differs from the old one……. Instead of being always right, financial markets are always wrong. They have the ability, however, both to correct themselves and occasionally to make their mistakes come true…….George Soros: The New Paradigm For Financial Markets

In New York, the Dow Jones Industrial Average lost 35 points to 11,807.43 points on thin trading due to anxiety around the Federal Reserve’s interest rate meeting tonight. Inflation concerns underscore the Fed’s decision with recent oil price records adding pressure. General concerns about the economy abound and a report showed that consumer confidence was at a 16-year low. Financial stocks rallied on speculation that HSBC will takeover UBS. UBS shares gained 7% and Lehman Brothers gained 6.8% with the US Financials Index (XLE) gaining 1.2%.