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| Currency | US Dollar |
|---|---|
| British Pound to US Dollar | 1.666111 |
| Euro to US Dollar | 1.490091 |
| Japanese Yen to US Dollar | 0.011126 |
| Canadian Dollar to US Dollar | 0.932314 |
At 12:55 p.m. ET today, the stock market looked like it was going to fall apart.
The Dow Jones industrials were down 266 points to below 8,000 for the first time since Oct. 10. The Standard & Poor's 500 index was at 819, more than 20 points below its Oct. 10 intraday low. The Nasdaq Composite Index was at 1,429, 65 points below its intraday low on Oct. 24.
But buyers suddenly came into the market in a breathtaking snapback rally.
As a result the Dow closed up 553 points, or 6.7%, to 8,835. The 911-point swing from the day's low to its high at 8,876 was the Dow's biggest jump since Oct. 13 and the third largest ever.
The S&P 500 jumped 59 points, or 6.9%, to 911. The Nasdaq rose 97 points, 6.5%, to 1,597.
The rally undid all of Wednesday's losses, which saw the Dow fall 411 points. More importantly, it left five major indexes -- the Dow, S&P 500, Nasdaq, Nasdaq-100 Index ($NDX.X) and the Russell 2000 Index ($RUT.X) -- above their closing lows on the year, which came on Oct. 27.
The performance supports the argument of analysts such as Carter Worth at Oppenheimer & Co. that the market has been creating a bottom since the beginning of October.
Friday will offer some hint of whether the U.S. market is stabilizing. Early futures trading suggests the market will open lower, with the Dow off 80 to 85 points, perhaps to 8,750. Stocks in Asia, Australia and New Zealand were higher in Friday trading, with Japan's Nikkei 225 Index ($N225) up nearly 3% to 8,483.
Today's rally generated volume of nearly 2 billion shares on the New York Stock Exchange and 3 billion shares on Nasdaq. Much of that was probably short covering by investors who had been betting the market would move lower since the Nov. 4 presidential election. (The Dow did drop 1,343 points, or 8.2%, between Nov. 5 and Wednesday.)
Today's rally was broad. Twenty-eight of the 30 Dow stocks had gains today, along with 476 S&P 500 stocks and 94 Nasdaq-100 stocks.
The only Dow losers: Citigroup (C, news, msgs), down 2% to $9.45, and the beleaguered General Motors (GM, news, msgs), down 4.2% to $2.95. GM fell after Sen. Chris Dodd, D-Conn., said that the odds of getting bailout legislation passed for automakers before President-elect Barack Obama took office were slim at best.
The catalyst that appeared to set off the rally was a rebound in oil prices.
Crude oil closed up 3.7% to $58.24 today, and energy stocks pushed higher in response, along with steel and other commodity stocks.
Chevron (CVX, news, msgs) was the top Dow performer with a 12.5% gain to $75.71. Chevron and ExxonMobil (XOM, news, msgs), up 9.4% to $75.41, added 119 points to the Dow alone.
The Select Sector SPDR-Energy (XLE, news, msgs) exchange-traded fund, which tracks the energy sector of the S&P 500, was up 11.8% to $49.84, the top performer of the ETFs that track the 10 sectors of the S&P 500. All 10 S&P sectors were higher today.
U.S. Steel (X, news, msgs) closed up 14% to $31.23. Alcoa (AA, news, msgs) jumped 10.1% to $11.20. Fertilizer maker Mosaic (MOS, news, msgs) rose 13.1% to $33.91.
The rally produced some big reversals, especially among technology stocks.
Tech bellwether Intel (INTC, news, msgs) saw its shares fall to $12.87 after the chip giant slashed its quarterly revenue estimate by $1 billion, citing "significantly weaker" demand for its products. But the stock took off with the market, finishing at $14.43, up 6.7% on the day.
Google (GOOG, news, msgs), which fell to $291 on Wednesday -- its first close under $300 since October 2005 -- fell an additional $11 this morning to $280. Then it soared to $312.08 -- a 7.2% gain on the day.
Microsoft (MSN, news, msgs), which had fallen to $18.74, jumped back to $21.25, up 4.7% on the day. (Microsoft is the publisher of MSN Money.)
| Index | Today | Chg. From 2008 low | 2008 low | Date |
|---|---|---|---|---|
| Dow Jones Industrial Average | 8,282.66 | 8.08% | 8,175.00 | Oct. 27 |
| Standard & Poor's 500 Index | 852.30 | 7.35% | 848.92 | Oct. 27 |
| Nasdaq Composite Index | 1,499.21 | 6.03% | 1,505.90 | Oct. 27 |
| Nasdaq-100 Index | 1,165.38 | 6.08% | 1,169.78 | Oct. 27 |
| Russell 2000 Index | 452.80 | 9.55% | 448.40 | Oct. 27 |
The big problems haven't gone away
Today's big rally -- and its volatility -- came as debate swirled over whether to bail out U.S.-based automakers and a new round of bad economic news.The number of initial jobless claims rose to the highest level since September 2001, the Labor Department reported this morning.
- Video: Is the market irrational?
First-time filings rose by 32,000 to 516,000 last week. The four-week moving average of new claims rose to 491,000, the highest level since March 1991.
The number of continuing jobless claims soared by 65,000 to 3.89 million, the highest figure since 1983.
First-time filings rose by 32,000 to 516,000 last week. The four-week moving average of new claims rose to 491,000, the highest level since March 1991.
The number of continuing jobless claims soared by 65,000 to 3.89 million, the highest figure since 1983.
Meanwhile two retailers reminded investors of the nasty environment for consumers.
Kohl's (KSS, news, msgs) earned $160.2 million, or 52 cents a share, on revenue of $3.8 billion. That was down from $194 million or 61 cents a share, on revenue of $3.83 billion a year ago. The company forecast fourth-quarter earnings of 90 cents to $1.05; Wall Street was looking for $1.27. The stock, up 5.9% in regular trading, was down 4.8% to $29.10 in after-hours trading.
Nordstrom (JWN, news, msgs) earned $71 million, or 33 cents a share, on revenue of $1.81 billion in the quarter. That's down from $166 million, or 68 cents, and revenue of $1.97 billion a year ago. The company is projecting 35 cents to 45 cents for the fourth quarter; the analyst estimate had been 70 cents.
The stock, which rose 2.7% to $12.96 in regular trading, was off 5.5% $12.25 after hours.
| Thur. | Wed. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
Crude oil (NYMEX) (per barrel) | $58.24 | $56.16 | $2.08 | -14.11% | -39.32% |
Heating oil (per gallon) | $1.8750 | $1.8354 | $0.0396 | -6.54% | -29.23% |
Natural gas (per million BTU) | $6.3180 | $6.4050 | -$0.0870 | -6.86% | -15.57% |
Unleaded gasoline (per gallon) | $1.3024 | $1.2481 | $0.0543 | -9.64% | -47.71% |
Wal-Mart beats the Street
Dow component Wal-Mart Stores (WMT, news, msgs) said it is also feeling the effects of the weak economy, cutting its full-year earnings forecast as a result -- although the mega-retailer still managed to beat the Wall Street forecast. The stock was up 4.4% to $54.93.Wal-Mart said full-year earnings will be between $3.42 and $3.46 per share, down from previous guidance of $3.43 to $3.50 per share and below analysts' expectations of $3.49 per share. The retail giant also said unfavorable exchange rates were to blame for the reduction.
- Top stocks blog: Recession's grim reaper can't catch Wal-Mart
Still, Wal-Mart reported earnings of $3.14 billion, or 80 cents per share, in the third quarter -- a 10% increase from the $2.86 billion, or 70 cents per share, last year. Earnings from continuing operations came in at 77 cents per share, a penny ahead of Wall Street expectations.
Revenue rose 7.4% to $97.6 billion, shy of the $98.4 billion estimate.
Wal-Mart has been weathering the economic downturn by attracting consumers with its discount pricing.
"Despite economic difficulties around the world, we achieved solid sales and earnings growth and we are optimistic about the upcoming holidays," CEO Lee Scott said in a statement.
The retail picture has been darkening this week: Circuit City (CC, news, msgs) filed for bankruptcy and Best Buy (BBY, news, msgs) slashed its outlook for the quarter, citing "seismic changes in consumer behavior." Best Buy was up 7.4% today to $23.59.
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"This is the end of the consumer-based economy," Peter Schiff, who runs the investment firm Euro Pacific Capital, told The Associated Press. "Americans have been buying too much stuff, and now the epic shopping spree is over."
Intel's 'shockingly bad guidance'
Intel had been planning to give an update on its financial position on Dec. 4, but the dire outlook prompted the company to announce the bad news early.Stock Charts (Year)
Intel
Wal-Mart Stores
Intel also lowered its outlook for gross margin -- the percentage of revenue a company retains after subtracting the direct costs of producing goods -- to 55%, plus or minus a few percentage points, from a previous forecast of 59%.
- Top Stocks blog: Intel's 'shock warning' shakes market
Intel isn't the only tech company suffering. Research firm IDC said in a report Wednesday that information technology spending around the world is expected to grow a mere 2.6% next year, less than half of the 5.9% growth the firm had previously forecast.
Intel joined the parade of tech companies that see tough times ahead.
Applied Materials (AMAT, news, msgs) said last Wednesday it will slash 1,800 jobs, or 12% of its work force because it sees business falling back.
National Semiconductor, meanwhile, said it will eliminate 330 jobs, or nearly 5% of its work force.
Applied Materials shares rose 14.3% to $11.37; National Semi jumped 9.2% to $12.37.
PC maker Dell (DELL, news, msgs) was down 2.2% to $10.27, the worst performer among Nasdaq-100 stocks.
Citigroup analyst Richard Gardner dialed back revenue and earnings expectations for Dell and rival Hewlett-Packard (HPQ, news, msgs), citing a "global deterioration in demand for PCs, printers" and other technology products.
Hewlett-Packard was up 1.8% to $31.71.
Mortgage applications jump, but foreclosures also rise
The number of Americans filing for mortgage applications rose a seasonally adjusted 11.9% last week from the previous week, the Mortgage Bankers Association said in a report this morning.Still, the number of applications was down a whopping 40% from the same week last year. Applications for mortgages to buy homes rose a seasonally adjusted 9%, while refinancing applications rose 16.1%.
The average rate for a 30-year fixed mortgage fell to 6.24% last week from 6.47% the week before.
Video on MSN Money
Another bailout for AIGLoans made to public transit systems across the country were guaranteed by AIG, but now these loans have been forced into default -- and the transit systems can't repay them. As a result, the Treasury is being forced to once again step in and save AIG, says Jim Jubak.
"October marks the 34th consecutive month where U.S. foreclosure activity has increased compared to the prior year," James Saccacio, chief executive officer of RealtyTrac, said in a statement.
Foreclosures hit a record 304,000 in August.
It's official: Germany in recession
Germany's Federal Statistics Office this morning said the country's gross domestic product fell by 0.5% in the third quarter, following a revised 0.4% contraction in the previous three months. The report put the country officially into recession territory for the first time since 2003.France and Italy are likely to follow the largest economy in Europe into a recession, said Jennifer McKeown, European economist at Capital Economics, to MarketWatch.com.
In Europe, stocks were mixed today. London's FTSE 100 Index was down 0.3% to 4,169, the German DAX 30 Index was up 0.6% to 4,650, and the broader DJStoxx 600 Index was down 1%.
The Nikkei 225 Index fell 5.3% to 8,239, the MSCI Asia Pacific Index lost 5%, and Hong Kong's Hang Seng Index ($HSIX) shed 5.2%.
Andrew Rosenbaum contributed to this report.
| Thur. | Wed. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
Treasurys | |||||
13-week Treasury bill | 0.190% | 0.140% | 0.050 | -56.32% | -93.95% |
5-year Treasury note yield | 2.387% | 2.364% | 0.023 | -15.38% | -30.91% |
10-year Treasury note yield | 3.818% | 3.665% | 0.153 | -3.83% | -5.38% |
30-year Treasury bond yield | 4.333% | 4.190% | 0.143 | -0.82% | -2.83% |
Currencies | |||||
U.S. Dollar Index | 87.405 | 88.050 | -0.645 | 1.23% | 13.96% |
British pound in dollars | $1.4806 | $1.4848 | -0.0042 | -7.97% | -25.57% |
Dollar in British pounds | £0.6754 | £0.6735 | 0.0019 | 8.66% | 34.35% |
Euro in dollars | $1.2525 | $1.2450 | 0.0075 | -1.75% | -14.30% |
Dollar in euros | € 0.7984 | € 0.8032 | -0.0048 | 1.78% | 16.69% |
Dollar in yen | 95.84 | 94.64 | 1.20 | -2.82% | -14.31% |
Canadian dollar in U.S. dollars | $0.811 | $0.807 | $0.0046 | -1.95% | -18.29% |
U.S. dollar in Canadian dollars | $1.234 | $1.240 | -$0.0069 | 2.01% | 22.40% |
Commodities | |||||
Gold | $705.00 | $718.30 | -$13.30 | -1.84% | -15.87% |
Copper | $1.6240 | $1.6555 | -$0.03 | -11.21% | -46.60% |
Silver | $8.8000 | $9.4800 | -$0.68 | -9.56% | -41.02% |
Corn | $3.7700 | $3.6950 | $0.08 | -6.10% | -17.23% |
Crude oil (NYMEX) (per barrel) | $58.24 | $56.16 | $2.08 | -14.11% | -39.32% |
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