The best that one can say about the stock market today was the major indexes were little changed at the close.
That's not bad, considering how weak the market had been in the last four sessions and the unsettling signals the market has been sending out recently.
The Dow Jones industrials finished down 25 points to 8,449, their fifth loss in a row.
The Standard & Poor's 500 Index and the Nasdaq Composite Index, however, ended with small gains. The S&P 500 was up 2 points to 872, and the Nasdaq added 8 points to 1,546.
Gains in energy and technology stocks helped the S&P 500 and the Nasdaq. Energy shares moved higher as crude oil rose 19 cents to $37.78 in New York.
The Dow gained 547 points between Dec. 26 and Jan. 6 and has given all of those gains back. The index is down 3.7% this year, the eighth worst eight-day start in its history, Dow Jones said this afternoon.
There have been just nine other years where the Dow has fallen 3% or more in the first eight days of trading. In two of those years -- 1982 and 1991 -- the Dow finished up about 20%. The average loss in the other eight years was 11.3%.
2008 was a member of that Ugly 8, with the Dow losing 33.8%.
The S&P 500, meanwhile, is down 3.5% for the year. About 80% of the time since 1933, a down January for the index means it will end the year lower. Here's the Dow data.
| Year | Dow close | 1st 8-day chg. | 1st 8-day % change | Full year % change |
|---|---|---|---|---|
| 1978 | 778.15 | -53.02 | -6.38% | -3.15% |
| 1916 | 94.07 | -5.08 | -5.12% | -4.19% |
| 1991 | 2,501.49 | -132.17 | -5.02% | 20.32% |
| 2008 | 12,606.30 | -658.52 | -4.96% | -33.84% |
| 1982 | 838.95 | -36.05 | -4.12% | 19.60% |
| 1901 | 67.89 | -2.82 | -3.90% | -8.70% |
| 1939 | 148.65 | -6.11 | -3.95% | -2.83% |
| 2009 | 8,448.56 | -327.83 | -3.74% | ? |
| 1977 | 968.25 | -36.4 | -3.62% | -17.27% |
| 1960 | 656.44 | -22.92 | -3.37% | -9.34% |
Source: Dow Jones
Four stocks pull Dow lower
The Dow was pulled lower by weakness in four stocks: Bank of America (BAC, news, msgs), down 6.8% to $10.65; General Electric (GE, news, msgs), down 5.6% to $14.94; Boeing (BA, news, msgs), down 2.9% to $42.46; and United Technologies (UTX, news, msgs), off 3% to $50.80. The four subtracted more than 42 points from the blue-chip index.Bank of America and GE both fell because analysts were becoming more pessimistic about the stocks.
Sandler O'Neill & Partners analyst Jeff Harte jointed a parade of analysts who have revised their fourth-quarter forecast for Bank of America. He also predicted Bank of America might cut its dividend. So far this month, the stock is down 24%.
GE fell after Barclays Capital analyst Robert Cornell wrote clients that GE's fourth-quarter profit may be at the low end of its forecast. He also predicted that tax benefits at GE Capital will contribute a "substantial" portion to per-share results.
The U.S. trade deficit contracted by the most in 12 years during November to $40.44 billion, the government said, as the recession sent oil prices into a record plunge and restrained demand for foreign goods.
Outside the U.S., it was a very bad day for Asian markets, and European markets were not much better. The MSCI Asia Pacific Index tumbled 3.2%, and Hong Kong's Hang Seng Index ($HSIX) dropped 2.2%. In Europe, the Dow Jones Stoxx 600 Index was down 1.7%, and London's FTSE 100 Index ($GB:UKX) had lost 0.6%.
Citigroup, Morgan Stanley to combine brokerages
Citigroup (C, news, msgs), which was Monday's problem, was up 5.4% to $5.90.- Top Stocks blog: Apartment stocks hurting in downturn
Citigroup and Morgan Stanley (MS, news, msgs) agreed to put their brokerage businesses together in a joint venture to be called Morgan Stanley Smith Barney.
The joint venture has $1.7 trillion in client assets and $14.9 billion in pro-forma revenue and more than 1,000 offices and 20,000 advisers around the globe.
Morgan Stanley will own 51% of the business; Citigroup will have 49% and will get a $2.7 billion upfront payment from Morgan Stanley. In addition, when the deal closes, Citi will recognize a $5.8 billion gain and will create about $6.5 billion of tangible common equity. There are arrangements for one side to buy additional stakes in the joint venture starting in the third year. The Wall Street Journal said Citigroup will have a sizable stake through at least the fifth year.
Morgan Stanley shares were up 0.4% to $18.86.
The Journal also said Citigroup will probably narrow its overall mission to two areas: wholesale banking for large corporate clients and retail banking for customers in selected markets around the world.
The moves would essentially undo large pieces of the financial supermarket created when Citicorp and Travelers Group merged in 1998 to form Citigroup.
| Tues. | Mon. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Crude oil (NYMEX) (per barrel) | $37.78 | $37.59 | $0.19 | -15.29% | -15.29% |
| Heating oil (per gallon) | $1.5141 | $1.4724 | $0.0417 | 7.71% | 7.71% |
| Natural gas (per million BTU) | $5.1840 | $5.5420 | -$0.3580 | -7.79% | -7.79% |
| Unleaded gasoline (per gallon) | $1.1489 | $1.0841 | $0.0648 | 13.96% | 13.96% |
Yahoo taps Carol Bartz as CEO
After the close, Yahoo (YHOO, news, msgs) named Carol Bartz, former chief executive of software company Autodesk (ADSK, news, msgs), as its new CEO, The Wall Street Journal and CNBC said.The offer caps Yahoo's two-month search for a leader to succeed Jerry Yang, its co-founder and former CEO who oversaw the company through Microsoft's acquisition offer and activist investor Carl Icahn's failed attempt to replace the Yahoo board.
Stock Charts (Year)
Yahoo
Sue Decker, who has been the company's president, will resign after a transition.
What's not clear is how long Yahoo will remain in its current form. Bartz is 60 and not expected to be a long-term CEO. The announcement generated another round of speculation that some sort of deal with Microsoft (MSFT, news, msgs) will emerge. (Microsoft is the publisher of MSN Money.)
Bernanke's warning
Federal Reserve Chairman Ben Bernanke had some worrisome comments about the economy this morning, saying that the timing of an economic recovery is "highly uncertain.""The Federal Reserve will do its part to promote economic recovery, but other policy measures will be needed as well," Bernanke said during a speech at the London School of Economics.
"The incoming administration and the Congress are currently discussing a substantial fiscal package that, if enacted, could provide a significant boost to economic activity. In my view, however, fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system."
Bernanke also said that "more capital injections and guarantees may become necessary to ensure stability and the normalization of credit markets."
JPMorgan chief expects continued weakness
JPMorgan Chase (JPM, news, msgs) pushed up its fourth-quarter earnings release date to Thursday, before the market opens.The company was originally set to release its results Jan. 21.
Stock Chart
JPMorgan Chase
JPMorgan shares closed up 5.8% to $26.35. The gain was the largest among the 30 Dow stocks.
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Santander slammed by Madoff mess
Spain's Banco Santander (STD, news, msgs) is the latest company to come under the microscope in connection with its dealings with Bernard Madoff.According to The Wall Street Journal, Spanish prosecutors are investigating how Europe's second-largest bank lost $3.1 billion in client funds that it invested with the the disgraced Wall Street investor, while losing mere millions in its own investments with Madoff.
The investigators want to know why Santander Chairman Emilio Botin sent one of his lieutenants, Rodrigo Echenique, to see Madoff in New York just weeks before Madoff's alleged $50 billion Ponzi scheme collapsed, the report said.
The losses suffered by Santander's clients are the biggest reported by any one bank, followed those at Britain's HSBC (HBC, news, msgs).
On Monday, a judge ruled that Madoff, who was charged with fraud in early December, could remain under house arrest at his New York apartment. U.S. prosecutors had wanted to put Madoff in jail for violating terms of his bail.
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Sony gets whacked by weak economy
Japanese electronics maker Sony (SNE, news, msgs) is expected to post its first yearly operating loss since 1995, according to the business newspaper Nikkei.Sony will likely lose 100 billion yen, or $1.1 billion, for its fiscal year that ends in March, because of slumping demand for flat-screen televisions and other products. In October, Sony said it expected to earn 200 billion yen. Sony posted an operating profit of 472.5 billion yen in the same period in 2007-08.
The loss would be the second ever for the company since it went public in 1958.
Shares of Sony fell 3.7% to $22.24 in New York.
China's exports slump
The effects of the global downturn are more broadly evident in China.The country's exports suffered a 2.8% decline in December, compared with the same month in 2007, a worse showing than the 2.2% drop seen in November, according to The China Daily.
The monthly decline was the worst since April 1999, according to one analyst's tally.
"Export growth is likely to be flat in 2009, with negative year-over-year growth in the near term," said Jing Ulrich, JPMorgan's chairwoman of China equities, in a report late Monday.
Sweden stiffs Volvo and Saab
The Swedish government announced today that it would not take over Volvo, now a division of Ford Motor (F, news, msgs) or Saab, now a division of General Motors (GM, news, msgs).The government also ruled out financial rescue packages for the two automakers.
Both Swedish companies have been losing money, and both are up for sale. Ford has been approached by several potential buyers for Volvo, while GM says that one company has expressed interest in Saab.
Both Ford and GM could use the cash from sales of the companies. GM has received a $13.4 billion government bailout package, while Ford has been discussing a federal loan guarantee.
Andrew Rosenbaum contributed to this report.
| Tues. | Mon. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Treasurys | |||||
| 13-week Treasury bill | 0.105% | 0.065% | 0.040 | -8.70% | -8.70% |
| 5-year Treasury note yield | 1.428% | 1.441% | -0.013 | -7.93% | -7.93% |
| 10-year Treasury note yield | 2.297% | 2.309% | -0.012 | 2.36% | 2.36% |
| 30-year Treasury bond yield | 3.017% | 2.990% | 0.027 | 12.11% | 12.11% |
| Currencies | |||||
| U.S. Dollar Index | 84.900 | 83.745 | 1.155 | 3.35% | 3.35% |
| British pound in dollars | $1.4486 | $1.4819 | -0.0333 | -1.68% | -1.68% |
| Dollar in British pounds | £0.6903 | £0.6748 | 0.0155 | 1.71% | 1.71% |
| Euro in dollars | $1.3191 | $1.3371 | -0.0180 | -5.84% | -5.84% |
| Dollar in euros | € 0.7581 | € 0.7479 | 0.0102 | 6.21% | 6.21% |
| Dollar in yen | 89.11 | 89.32 | -0.21 | -1.70% | -1.70% |
| Canadian dollar in U.S. dollars | $0.817 | $0.821 | -$0.0044 | -0.11% | -0.11% |
| U.S. dollar in Canadian dollars | $1.225 | $1.217 | $0.0075 | 0.12% | 0.12% |
| Commodities | |||||
| Gold | $820.70 | $821.00 | -$0.30 | -7.19% | -7.19% |
| Copper | $1.5470 | $1.4885 | $0.06 | 9.72% | 9.72% |
| Silver | $10.6800 | $10.7500 | -$0.07 | -5.44% | -5.44% |
| Corn | $3.6250 | $3.8075 | -$0.18 | -10.93% | -10.93% |
| Crude oil (NYMEX) (per barrel) | $37.78 | $37.59 | $0.19 | -15.29% | -15.29% |
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