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.

The Commerce Department said that the US trade deficit narrowed to its smallest gap in nearly six years as oil prices kept falling due to the global economic slowdown. Americans cut purchases of imported staples including food, cars and shoes.
Prices of long-dated Treasury securities rose Wednesday despite new debt supply, as investors continued to fret about the latest US bank rescue plan.
At 7:45 AM (AEST), the 10-year Treasury note yield was 2.74% and the five year yield was 1.75%.
European shares lost ground for the second straight session Wednesday as details about a plan to shore up the US banking system remained scarce.
The pan-European Dow Jones Stoxx 600 index declined 0.4% to 193.13, with losses fronted by the banking sector.
The Stoxx 600 index snapped a five session winning streak on Tuesday after US Treasury Secretary Timothy Geithner said that the US government will use mostly private money to create a fund of at least $500bn to recapitalise banks and another fund of $1tr to support consumer and business lending.
The major national indexes all saw advances: the French CAC 40 rose 0.2% to 3,027.72, the UK FTSE 100 added 0.5% to 4,234.26 and the German DAX 30 rose 0.5% to 4,530.09.
Many other European national indexes fell, however, with losses in Austria, Denmark, Italy, Ireland and Switzerland.
Banks trading lower included Natixis, which fell 7.5%, and HSBC Holdings, which dropped 1.9%.
Irish lenders were weak also, with Irish Life & Permanent, Bank of Ireland and Allied Irish Banks down between 7.5% and 12%. On Wednesday Irish Life & Permanent disclosed that it provided “exceptional support” to Anglo Irish Bank last September.
Earnings were also a focus for the sector, with Credit Suisse Group reversing early losses to trade up 1%. The lender swung to a wider-than-expected fourth-quarter net loss of 6.02bn Swiss francs.
BNP Paribas shares traded fell 2.1% after Fortis shareholders rejected a deal to sell some of the bank’s Belgian assets to the French bank. Fortis shares were suspended, and its future was unclear after the decision.
Also in Paris, Peugeot shares dropped 2% as the French automaker swung to a EUR343m loss in 2008.
Still, gains from the pharmaceutical and industrial sectors kept losses for the broader market in check. Of drugmakers, shares of Sanofi-Aventis jumped 8.1%.
Asian share markets ended broadly lower Wednesday after Wall Street gave the thumbs down to Treasury Secretary Timothy Geithner’s revised proposal to shore up US banks, though the declines weren’t as large as in the US as cautious investors awaited further cues from global markets.
Japanese markets were closed for a public holiday. Hong Hong’s Hang Seng Index was the worst performer in Asia, dropping 2.5%.
Disappointment over the US government’s revised bank rescue plan pulled New Zealand shares lower Wednesday, but the local market held up better than many of its offshore counterparts. The benchmark NZX-50 Index ended down 0.7%, or 19.83 points, at 2,730.23. The market earlier dropped as much as 1.1% after Wall Street plunged on lack of details in Treasury Secretary Timothy Geithner’s bank bailout plan.
Base metals on the London Metal Exchange traded mixed late Tuesday in Europe, recouping losses made earlier in the day, with copper and nickel leading the way lower.
A continued flight to safety triggered a technical breakout to the upside as gold climbed to its strongest level since July. Gold futures rose $26.90 (2.94%) to 941.10
Crude fell Wednesday as US oil inventories approached a multiyear high. West Texas Intermediate was last quoted at $35.94.