Stocks limped to their first two-day rally since early February, offering some hope that market bulls had regained control of the markets.
The Dow Jones industrials, up 379 points on Tuesday, added 4 points to 6,930. The Standard & Poor's 500 Index was up 2 points to 721, and the NasdaqComposite Index was up 13 points to 1,372.
The last time the major indexes posted two straight days of gains was Feb. 5-6. Today's was also the third gain in four sessions.
Techs and financial companies, especially Apple (AAPL, news, msgs), Hewlett-Packard (HPQ, news, msgs), Morgan Stanley (MS, news, msgs) and US Bancorp (USB, news, msgs), helped the market move higher and offset declines in health care and energy shares.
Adding to the goodwill that came over the markets today were comments by JPMorgan Chase (JPM, news, msgs) CEO Jamie Dimon, who declared himself optimistic about the economy.
JPMorgan's bond department had two of their best months ever in January and February, he told the U.S. Chamber of Commerce.
"There are modest signs of recovery and healing out there," he said. A number of financial companies have said they'd been generating profits so far this year, for example.
Plus, he said, if it had not been for the federal government's active role last fall and even recently, the economy would be in far worse shape.
Stocks were moving lower as Dimon began speaking but rebounded by the end. Dimon "calmed the markets down. He was the voice of reason," said Angel Mata, head of equity trading at Stifel Nicolaus Capital Markets in Baltimore.
Futures trading suggests a flat-to-higher open on Thursday.
A better performance than it looks
The modest finish came after a day that saw the Dow up as many as 89 points and down as many as 59 points.While there was some disappointment that there wasn't a big gain for the market, the market internals were fairly good.
Volume was stronger than usual -- 1.7 billion shares on the New York Stock Exchange and 2.2 billion shares on Nasdaq.
While just half the Dow stocks were ahead on the day, 280 S&P 500 stocks were higher, along with 59 stocks in the Nasdaq-100 Index ($NDX.X), which tracks the largest Nasdaq stocks. The index was up 14 points to 1,126.
A broader look at the market support should cheer bulls. Gainers were ahead of decliners on the NYSE and Nasdaq, a good sign, and up volume -- the volume of shares that finished higher on the day -- was ahead of down volume 1.5-to-1 on the NYSE and 2.5-to-1 on Nasdaq.
"There is a creeping sense that there is stability coming back into the markets, albeit at extremely stressed levels," Art Hogan, chief market strategist at Jefferies & Co., told CNNMoney.
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Don't get too cheery. Floor traders told CNBC's Bob Pisani this afternoon that they are seeing short-sellers establishing new positions. So, there may be more pressure ahead.
Stocks have fallen more than 50% since peaking in October 2007; the Dow is off 21% this year, with the S&P 500 down 20% and the Nasdaq off 13%.
Apple gives techs a boost
Apple was up 4.6% to $92.68, after introducing a new tiny version of its iPod shuffle music player. The gain added nearly 7 points to Nasdaq-100 Index.Hewlett-Packard, meanwhile, was up 5.8% to $28.61 and was the second-best performer among the 30 Dow stocks. UBS upgraded the stock to "buy."
Stock Charts (Year)
Apple
General Electric
Morgan Stanley rose 8% to $22.51 after Goldman Sachs analysts recommended buying the shares. Goldman also upgraded US Bancorp; shares were up 9% to $12.42.
Drug stocks were weak after McKesson (MCK, news, msgs), the largest U.S. drug distributor, dropped 17.1% to $34.77, a decline that spread across drug and health care stocks. A Deutsche Bank analyst said its earnings may be hurt by rising bankruptcies among drugstores.
Oil stocks were lower as crude oil fell below $43 -- 7.4% to $42.33. Exxon Mobil (XOM, news, msgs) was down 2.4% to $65.77, subtracting nearly 15 points from the Dow. Chevron (CVX, news, msgs) fell 0.9% to $61.22 and pulled 4.5 points from the Dow.
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Crude oil supplies rose by 700,000 barrels last week, the Energy Information Administration said in its weekly report. Gasoline inventories fell by 3 million barrels, and distillate supplies rose by 2.1 million.
Lastly, General Electric (GE, news, msgs) was off 4.8% to $8.49. Despite that, the stock is up 48% since bottoming at $5.73 on March 4.
| Wed. | Tues. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Crude oil (NYMEX) (per barrel) | $42.33 | $45.71 | -$3.38 | -5.43% | -5.09% |
| Heating oil (per gallon) | $1.1331 | $1.1987 | -$0.0656 | -10.49% | -19.39% |
| Natural gas (per million BTU) | $3.7980 | $3.8400 | -$0.0420 | -9.53% | -32.44% |
| Unleaded gasoline (per gallon) | $1.2512 | $1.2972 | -$0.0460 | -2.30% | 24.10% |
The world's richest just got . . . a little poorer
Maybe the rich aren't so different from the rest of us after all.The global economic crisis has reduced the number of billionaires and made the richest people in the world poorer, Forbes magazine says.
Forbes found 793 billionaires in 2009, down 30% from a year earlier. This is the first decline since 2003.
The total net worth of people on the magazine's list this year fell 46% to $2.4 trillion. The average billionaire is now worth $3 billion, 23% less than in 2008.
Despite losing $18 billion in the past year, Microsoft (MSFT, news, msgs) co-founder Bill Gates reclaimed the title of richest man in the world, with a total net worth of $40 billion. (Microsoft is the publisher of MSN Money.)
Berkshire Hathaway (BRK.A., news, msgs) Chairman Warren Buffett is No. 2, with $37 billion. He lost $25 billion in the past year as shares in his company dropped nearly a third in value.
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Freddie Mac loses big, has big needs
After the close, Freddie Mac (FRE, news, msgs), still suffering from the lax mortgage-lending practices of the housing boom, reported a loss of $23.9 billion for the fourth quarter and said it will need a $30.8 billion injection of capital from the government.The government-backed provider of funding for home mortgages also said it expects its provisions for losses on mortgage defaults to remain high this year. It is likely to require further funds from the Treasury. Freddie Mac lost $2.45 billion in the year-earlier quarter.
For all of 2008, Freddie Mac said it lost $50.1 billion, vastly larger than its 2007 loss of $3.1 billion.
The losses over the past two years exceed the total of about $42 billion earned by the company from 1971 through 2006, The Wall Street Journal noted.
Bernie Madoff to plead guilty
Disgraced financier Bernie Madoff is facing 150 years in prison.He was at a hearing Tuesday and is expected to plead guilty at a second one on Thursday, without any sort of plea deal.
The government says it could seek $170 billion from Madoff. His victims range from charitable organizations to celebrities.
Sources close to the investigation have said Madoff had not made trades for clients in nearly 13 years.
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Madoff was arrested in December for securities fraud and charged with running a $50 billion Ponzi scheme. He has since been under house arrest in his Manhattan penthouse apartment.
Separately, Texas billionaire Allen Stanford, accused of an $8 billion fraud by federal regulators, has refused to cooperate in the government's probe, a court filing said.
The Securities and Exchange Commission has charged Stanford, two of his top aides and three of his companies with operating a long-running fraud involving high-yield certificates of deposit. He is also accused of misappropriating $1.6 billion in investor funds.
Stanford took the Fifth Amendment privilege against self-incrimination and won't testify or provide an accounting on the charges, the filing in federal court in Dallas said.
Stanford's attorney Charles Meadows has said the SEC's claims were false.
Second stimulus package coming?
President Barack Obama's $787 billion economic stimulus was approved mere weeks ago, and the federal government is already considering a second package.House Speaker Nancy Pelosi, D-Calif., said that the government has "to keep the door open" regarding further action to boost the economy, The Wall Street Journal reported late Tuesday. Pelosi spoke at a closed-door meeting with economists.
Meanwhile, the Treasury Department plans to use capital injections to get troubled U.S. banks to sell their distressed assets, according to published reports.
"In conception, it's reasonably well designed; the question is in the execution," Randal Quarles, a former Treasury undersecretary who now works at the Carlyle Group, told Bloomberg. "There are a lot of details that remain to be worked out."
Treasury Secretary Tim Geithner, who has come under fire for lack of clarity regarding the administration's bank rescue plan, said on "The Charlie Rose Show" that the department will issue "precise" details of the plan in coming weeks.
"People will see how it's going to operate and then it will go into place over the following weeks and months," Geithner said.
Meanwhile, the Federal Reserve may take further action to add liquidity to the economy, The Wall Street Journal reported this morning. The Fed could purchase long-term Treasury securities or could increase purchases of debt issued or guaranteed by Fannie Mae (FNM, news, msgs) and Freddie Mac (FRE, news, msgs), the paper said. The Fed will meet on March 17 and 18.
Mortgage applications rise
The average interest rate for 30-year fixed mortgages fell to 4.96% last week, down from 5.14% the previous week, and that inspired some would-be borrowers.Mortgage applications rose 11.3% last week, with applications to buy homes up a seasonally adjusted 7.1% and refinancing applications up 13.3%, the Mortgage Bankers Association said in a report this morning.
Overall, mortgage applications were up 5.7% from the same week a year ago, the MBA said.
UBS has a bigger loss
UBS (UBS, news, msgs) this morning said its revised loss for 2008 totaled 20.9 billion Swiss francs, or $18 billion, more than the Swiss bank originally reported.The change was due to costs related to a settlement with the U.S. Internal Revenue Service, the bank said.
The company also issued cautious guidance, saying that its earnings will "remain at risk for some time to come." Chief Executive Officer Oswald Gruebel said that the company's "near-term outlook remains extremely cautious."
The guidance was not nearly as optimistic as recent comments from Citigroup, Bank of America (BAC, news, msgs) and JPMorgan Chase. All have said that they have been profitable so far in 2009.
Shares of UBS were up 2.3% to $8.61 in New York today.
More from MSN Money
Which banks will pay back TARP funds first?
Goldman Sachs analysts are predicting which banks will be the first to pay back the government for the Troubled Asset Relief Program funds given to them in recent months to help them weather the financial meltdown.The analysts believe Bank of New York Mellon (BK, news, msgs), JPMorgan Chase, Morgan Stanley and Northern Trust (NTRS, news, msgs) are among the companies that could pay the funds back soon. "(W)e think the regional banks, First Horizon, Comerica and City National, are likely to repay TARP in 2010 rather than 2009," the analysts said in a note to clients.
American Express (AXP, news, msgs) wasn't so lucky; Goldman downgraded that stock to "conviction sell" from "neutral," citing accelerating delinquencies at the company relative to the industry. The Dow component fell 2% to $11.93.
China's exports decline
China's exports plunged 25.7% in February from the previous year. That was far more than the 5% that analysts had predicted.Imports also fell 21.4%. The resulting trade surplus was $4.84 billion, the lowest the country has seen in three years.
"China has finally and spectacularly succumbed to the world financial crisis on the export side, and it's difficult to see why that would improve in the short term," Paul Cavey, an economist with Macquarie Securities in Hong Kong told Thomson Reuters.
| Wed. | Tues. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Treasurys | |||||
| 13-week Treasury bill | 0.220% | 0.235% | -0.015 | -12.00% | 91.30% |
| 5-year Treasury note yield | 1.951% | 1.984% | -0.033 | -3.42% | 25.79% |
| 10-year Treasury note yield | 2.916% | 2.982% | -0.066 | -4.11% | 29.95% |
| 30-year Treasury bond yield | 3.657% | 3.707% | -0.050 | -1.75% | 35.90% |
| Currencies | |||||
| U.S. Dollar Index | 87.885 | 88.940 | -1.055 | -0.30% | 6.98% |
| British pound in dollars | $1.3893 | $1.3753 | 0.0139 | -3.00% | -5.71% |
| Dollar in British pounds | £0.7198 | £0.7271 | -0.0073 | 3.09% | 6.06% |
| Euro in dollars | $1.2850 | $1.2686 | 0.0165 | 1.34% | -8.28% |
| Dollar in euros | € 0.7782 | € 0.7883 | -0.0101 | -1.32% | 9.02% |
| Dollar in yen | 97.56 | 98.70 | -1.14 | -0.05% | 7.62% |
| Canadian dollar in U.S. dollars | $0.778 | $0.781 | -$0.0029 | -0.96% | -4.89% |
| U.S. dollar in Canadian dollars | $1.286 | $1.281 | $0.0055 | 0.96% | 5.13% |
| Commodities | |||||
| Gold | $910.70 | $895.90 | $14.80 | -3.37% | 2.99% |
| Copper | $1.6255 | $1.6745 | -$0.05 | 5.65% | 15.28% |
| Silver | $12.8000 | $12.5400 | $0.26 | -2.36% | 11.02% |
| Corn | $3.6450 | $3.7550 | -$0.11 | 3.92% | -10.44% |
| Crude oil (NYMEX) (per barrel) | $42.33 | $45.71 | -$3.38 | -5.43% | -5.09% |
Andrew Rosenbaum contributed to this report.
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