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Obama mortgage plan news spurs late market rally
Source: Agencies |
February 13, 2009, Friday
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Online Edition
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US stocks staged a late rally to close mostly higher yesterday after Reuters reported the Obama administration was working on a program to subsidize mortgage payments for troubled homeowners.
The S&P 500 and Nasdaq ended higher while the Dow industrials retraced losses to close slightly lower as investors starved for good news bet the government had taken a big step toward stabilizing the housing market.
Banks and homebuilders, which had helped drag the market lower throughout the session, more than halved their losses after Reuters reported the government was working on a program that would help homeowners most in need before they fall into arrears.
"It's being viewed as a positive both for the mortgage industry and home building industry as well," said Richard Sparks, senior equities analyst at Schaeffer's Investment Research in Cincinnati, Ohio.
The Dow Jones industrial average shed 6.77 points, or 0.09 percent, to end at 7,932.76. The Standard & Poor's 500 Index added 1.45 points, or 0.17 percent, to 835.19. The Nasdaq Composite Index rose 11.21 points, or 0.73 percent, at 1,541.71.
Before the rally in the last hour of trading, which retraced a 3 percent drop in the Dow, investors feared a US$789 billion economic stimulus package to be voted on as early as Friday would not be enough dig the economy out of recession.
Solid quarterly results from Coca-Cola Co underpinned the rally, as it ended up 7.6 percent at US$44.39 making it top driver of the Dow.
Gains in big-cap technology stocks, including iPhone maker Apple and BlackBerry maker Research in Motion, which rebounded after a 14.5 percent drop Wednesday, helped lift Nasdaq.
Apple ranked as the top gainer on Nasdaq, ending up 2.5 percent to US$99.27.
The decline in the S&P 500 pushed it to near three-month lows earlier in the session, and the index is now up more than 12 percent from the bear-market intraday low set in Nov. 21.
The KBW Bank index fell 2.8 percent and the S&P Financial Index shed 1.3 after earlier falling by over 6 percent and 7 percent, respectively.
Investors have grown increasingly wary of the government plan to cleanse the financial sector of toxic assets that have constrained lending, deepening the recession.
Among banking shares, Citigroup fell 2.2 percent to US$3.61; Wells Fargo, fell 4 percent at US$16.80, and Bank of America dipped 3.3 percent to US$5.87, each well above their session lows.
Government data showing that the number of people staying on unemployment benefits after drawing an initial week of aid hit a record in the last week of January, which underscored the toll of the 14-month-old recession on the labor market.
Volume was moderate on the New York Stock Exchange, where about 1.48 billion shares changed hands, roughly in line with last year's estimated daily average volume of 1.49 billion shares. On the Nasdaq, about 2.47 billion shares traded, slightly above last year's daily average of 2.28 billion.
Decliners outnumbered advancers on the NYSE by a ratio of about 11 to 10, while on the Nasdaq, the ratio was about even.
The S&P 500 and Nasdaq ended higher while the Dow industrials retraced losses to close slightly lower as investors starved for good news bet the government had taken a big step toward stabilizing the housing market.
Banks and homebuilders, which had helped drag the market lower throughout the session, more than halved their losses after Reuters reported the government was working on a program that would help homeowners most in need before they fall into arrears.
"It's being viewed as a positive both for the mortgage industry and home building industry as well," said Richard Sparks, senior equities analyst at Schaeffer's Investment Research in Cincinnati, Ohio.
The Dow Jones industrial average shed 6.77 points, or 0.09 percent, to end at 7,932.76. The Standard & Poor's 500 Index added 1.45 points, or 0.17 percent, to 835.19. The Nasdaq Composite Index rose 11.21 points, or 0.73 percent, at 1,541.71.
Before the rally in the last hour of trading, which retraced a 3 percent drop in the Dow, investors feared a US$789 billion economic stimulus package to be voted on as early as Friday would not be enough dig the economy out of recession.
Solid quarterly results from Coca-Cola Co underpinned the rally, as it ended up 7.6 percent at US$44.39 making it top driver of the Dow.
Gains in big-cap technology stocks, including iPhone maker Apple and BlackBerry maker Research in Motion, which rebounded after a 14.5 percent drop Wednesday, helped lift Nasdaq.
Apple ranked as the top gainer on Nasdaq, ending up 2.5 percent to US$99.27.
The decline in the S&P 500 pushed it to near three-month lows earlier in the session, and the index is now up more than 12 percent from the bear-market intraday low set in Nov. 21.
The KBW Bank index fell 2.8 percent and the S&P Financial Index shed 1.3 after earlier falling by over 6 percent and 7 percent, respectively.
Investors have grown increasingly wary of the government plan to cleanse the financial sector of toxic assets that have constrained lending, deepening the recession.
Among banking shares, Citigroup fell 2.2 percent to US$3.61; Wells Fargo, fell 4 percent at US$16.80, and Bank of America dipped 3.3 percent to US$5.87, each well above their session lows.
Government data showing that the number of people staying on unemployment benefits after drawing an initial week of aid hit a record in the last week of January, which underscored the toll of the 14-month-old recession on the labor market.
Volume was moderate on the New York Stock Exchange, where about 1.48 billion shares changed hands, roughly in line with last year's estimated daily average volume of 1.49 billion shares. On the Nasdaq, about 2.47 billion shares traded, slightly above last year's daily average of 2.28 billion.
Decliners outnumbered advancers on the NYSE by a ratio of about 11 to 10, while on the Nasdaq, the ratio was about even.
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