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Wall Street up as lawmakers near stimulus deal
Source: Agencies |
February 12, 2009, Thursday
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US stocks rose in a choppy session yesterday after lawmakers reached a compromise deal on a US$789 billion stimulus package that is seen as crucial to reviving the recession-hit economy.
Senate majority leader Harry Reid said differences have been bridged between the two versions of the package that had been passed by the House of Representatives and the Senate, and that votes on the final bill could come as early as today.
"They really needed to make sure they locked up a few Republicans to get this through," said Marc Pado, US market strategist at Cantor Fitzgerald & Co. in San Francisco.
"The fact they were able to compromise was sufficient to get the market to take a breath after yesterday. That I think is what helped turn the market around."
Stocks had see-sawed during the day, hurt by falling crude oil prices and declines in technology shares before finally holding gains on the stimulus package.
Bank shares, which had traded higher throughout the day as bargain-hunters moved in after Tuesday's 14 percent sell-off, added to gains on hopes the stimulus package will reinvigorate the economy. The KBW bank index rose 6 percent.
The Dow Jones industrial average gained 50.65 points, or 0.64 percent, to 7,939.53. The Standard & Poor's 500 Index climbed 6.58 points, or 0.80 percent, to 833.74. The Nasdaq Composite Index added 5.77 points, or 0.38 percent, to 1,530.50.
The Dow is up 6.6 percent from its Nov. 21 low while the S&P is up 12.5 percent. The blue-chip index is down 0.8 percent for the month and 9.5 percent year-to-date.
JPMorgan Chase was among the Dow's biggest lifts, rising 6 percent to US$26.09, while the S&P financial index gained more than 5 percent.
Gains on the Nasdaq were capped as tech stocks were hit by a disappointing profit outlook from Research in Motion and a loss from graphic chipmaker Nvidia Corp that was greater than expected, highlighting the slowdown in both business and consumer spending.
Research In Motion was the top drag on the Nasdaq, falling 14.5 percent to US$48.76 while Nvidia tumbled 12.6 percent to US$8.15.
Exxon Mobil was the top weight on the Dow, falling 2.1 percent as crude oil futures tumbled more than 4 percent, weighed down by a large increase in domestic crude inventories last week and a gloomy oil demand forecast from the International Energy Agency.
But the financial sector was solidly higher, also getting a boost from Marsh & McLennan Cos Inc after the No. 2 global insurance broker posted a better-than-expected fourth-quarter profit and forecast higher profits in 2009. The stock jumped 14.4 percent to US$21.41.
Citigroup jumped 10.2 percent to US$3.69 and Bank of America added 9.2 percent to US$6.07.
Volume was light on the New York Stock Exchange, where about 1.36 billion shares changed hands, below last year's estimated daily average volume of 1.49 billion shares, while on the Nasdaq, about 2.24 billion shares traded, roughly in line with last year's daily average of 2.28 billion.
Advancers outnumbered decliners on the NYSE by a ratio of about 3 to 2, while on the Nasdaq, about 5 stocks rose for every 4 that fell.
Senate majority leader Harry Reid said differences have been bridged between the two versions of the package that had been passed by the House of Representatives and the Senate, and that votes on the final bill could come as early as today.
"They really needed to make sure they locked up a few Republicans to get this through," said Marc Pado, US market strategist at Cantor Fitzgerald & Co. in San Francisco.
"The fact they were able to compromise was sufficient to get the market to take a breath after yesterday. That I think is what helped turn the market around."
Stocks had see-sawed during the day, hurt by falling crude oil prices and declines in technology shares before finally holding gains on the stimulus package.
Bank shares, which had traded higher throughout the day as bargain-hunters moved in after Tuesday's 14 percent sell-off, added to gains on hopes the stimulus package will reinvigorate the economy. The KBW bank index rose 6 percent.
The Dow Jones industrial average gained 50.65 points, or 0.64 percent, to 7,939.53. The Standard & Poor's 500 Index climbed 6.58 points, or 0.80 percent, to 833.74. The Nasdaq Composite Index added 5.77 points, or 0.38 percent, to 1,530.50.
The Dow is up 6.6 percent from its Nov. 21 low while the S&P is up 12.5 percent. The blue-chip index is down 0.8 percent for the month and 9.5 percent year-to-date.
JPMorgan Chase was among the Dow's biggest lifts, rising 6 percent to US$26.09, while the S&P financial index gained more than 5 percent.
Gains on the Nasdaq were capped as tech stocks were hit by a disappointing profit outlook from Research in Motion and a loss from graphic chipmaker Nvidia Corp that was greater than expected, highlighting the slowdown in both business and consumer spending.
Research In Motion was the top drag on the Nasdaq, falling 14.5 percent to US$48.76 while Nvidia tumbled 12.6 percent to US$8.15.
Exxon Mobil was the top weight on the Dow, falling 2.1 percent as crude oil futures tumbled more than 4 percent, weighed down by a large increase in domestic crude inventories last week and a gloomy oil demand forecast from the International Energy Agency.
But the financial sector was solidly higher, also getting a boost from Marsh & McLennan Cos Inc after the No. 2 global insurance broker posted a better-than-expected fourth-quarter profit and forecast higher profits in 2009. The stock jumped 14.4 percent to US$21.41.
Citigroup jumped 10.2 percent to US$3.69 and Bank of America added 9.2 percent to US$6.07.
Volume was light on the New York Stock Exchange, where about 1.36 billion shares changed hands, below last year's estimated daily average volume of 1.49 billion shares, while on the Nasdaq, about 2.24 billion shares traded, roughly in line with last year's daily average of 2.28 billion.
Advancers outnumbered decliners on the NYSE by a ratio of about 3 to 2, while on the Nasdaq, about 5 stocks rose for every 4 that fell.
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