STOCK MARKET WATCH, Friday January 2

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday January 2, 2009

DAYS REMAINING UNTIL BUSH IS EVICTED = 18

AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.
$1 USD = EUR 1.06678
$1 USD = JPY 116.6200

In recognition of those who predicted the Dow's precipitous return on Bush values (9/29/08): JuneBourder and AnneD

AT THE CLOSING BELL ON December 31, 2008

Dow... 8,776.39 +108.00 (+1.23%)
Nasdaq... 1,577.03 +26.33 (+1.70%)
S&P 500... 903.25 +12.61 (+1.42%)
Gold future... 884.30 +14.30 (+1.62%)
30-Year Bond 2.69% +0.11 (+4.18%)
10-Yr Bond... 2.24% +0.16 (+7.52%)

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U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES..............................................S&P FUTURES

Market Conditions During Trading Hours

GOLD,EURO, YEN, Loonie and Silver

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Handy Links

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Read more: du

[ozymandius]

1. Market WrapUp

Precious Metals Update
BY CHRIS PUPLAVA

Today’s article updates the 10/29/08 WrapUp, “What Goes Down Must Go Up.” The essence of the October commentary was to point out the statistical extreme that gold stocks were displaying on an absolute and relative basis. Gold stocks bottomed two days prior to the WrapUp after putting in the most oversold reading in more than two decades. The Philadelphia Gold & Silver Index (XAU) was 61.3% below its 200 day moving average, nearly twice the extreme seen in prior sell offs that saw the XAU fall 30% to 35% below its 200 day moving average. The XAU has staged a dramatic rally since October, rising nearly 95% in a span of two months. If the XAU continues its bullish trend the next likely target for the XAU is 135 using a 50% Fibonacci retracement level, with the 200d MA closing in on that level as well, though a correction back to the 50d MA is also possible after a nearly 100% move in two months before it heads to a new high.

.....

One point that was brought up in the October article was that the strong move in oil prices was proving to be a headwind for precious metal stocks in the first part of the year as their profit margins were getting squeezed by higher energy prices, using the gold to oil ratio as a rough profit margin proxy for precious metal stocks. Because of this development, while gold was rising strongly in the first half of the year the XAU and HUI were lagging gold as the XAU to gold ratio fell. The explosive swing in the gold to oil ratio is positive for precious metal producers as their profit margins will be expanding ahead. Improvement in precious metal producer profit margins signals positive relative strength of precious metal stocks relative to gold. As seen in the figure below, the XAU’s relative strength to gold has some major catching up to do with the gold to oil ratio. Another similar comparison with the gold to oil ratio is the precious metal stocks (XAU) to energy stocks (XOI) ratio. As an improvement in the gold to oil ratio signals precious metal stock outperformance relative to gold, it also signals outperformance of gold and silver stocks relative to energy stocks.

.....

In summary, precious metal stocks have been bludgeoned to death this year, reaching major statistical oversold extremes on both an absolute and relative basis. Significant improvement in the gold to oil ratio signals a strong relative performance of precious metals stocks to both gold and oil stocks ahead, with silver also beginning to show better value relative to gold. Using deductive reasoning, with precious metal stocks offering better value than gold, and with silver offering better value to gold, silver stocks may prove to be the top performing area within the commodity complex in 2009 as they pose the greatest relative value.

http://www.financialsense.com/Market/wrapup.htm

[ozymandius]

2. Today's Report

10:00 ISM Index Dec
Briefing.com 35.0
Consensus 35.4
Prior 36.2

http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm

[UpInArms]

36. U.S. Dec. ISM index 32.4% vs. 36.3% expected - Surprise!

05. U.S. Dec. ISM index 32.4% vs. 36.3% expected
10:02 AM ET, Jan 02, 2009

more surprised eCONomists!

[UpInArms]

37. U.S. manufacturing weakens in December

http://www.marketwatch.com/news/story/US-manufacturing-weakens-December/story.aspx?guid=%7B53BB1B9E%2DA4D1%2D420E%2DA849%2D8484541AEF4F%7D

WASHINGTON (MarketWatch) -- The ISM index, a key manufacturing gauge, stood at 32.4% in December, showing the sector's fifth consecutive monthly decline. Economists surveyed by MarketWatch were expecting the ISM index to rise slightly from November's reading, to 36.3%. Orders, production, employment and inventories all contracted in December, according to the Institute for Supply Management.

[UpInArms]

39. 32.4% was the weakest since June 1980

Its reading of 32.4% was the weakest since June 1980, and below the consensus estimate of 35.4%. A number below 50% indicates a contraction.

[UpInArms]

44. U.S. factories mired in worst slump in 28 years and prices were the weakest since 1949

http://www.reuters.com/article/bondsNews/idUSN0236042820090102?sp=true

NEW YORK, Jan 2 (Reuters) - U.S. factory activity fell to a 28-year low in December as the deepening year-old recession hammered the manufacturing sector, producing a bleak outlook at the start of 2009.

The Institute for Supply Management said on Friday its index of national factory activity fell to 32.4 -- a figure indicating contraction and the lowest reading since 1980 -- from 36.2 in November. Its jobs gauge also hit the lowest level since 1982 and prices were the weakest since 1949.

The report on U.S. manufacturing echoed the dour tone set in factory surveys around the globe and indicated rough times ahead, with a gauge of new orders hitting its lowest level ever.

"Overall this is a very weak report, suggesting no sign of stabilization yet," said Ian Lyngen, interest rate strategist at RBS Greenwich Capital in Greenwich, Connecticut.

December's result represents a significant slump, since any reading below 50 in the overall ISM index indicates contraction.

Stocks briefly turned negative after the unexpectedly weak report but then resumed their New Year rally.

U.S. government bonds, generally sought after by investors during troubled economic times such as these, briefly added to gains but then fell, giving way to strength in stocks.

...more...

[ozymandius]

3. Oil falls to below $42 a barrel

LONDON – Oil prices fell below $42 a barrel Friday after Russia and Ukraine said a dispute over natural gas payments wouldn't affect shipments to Western Europe.

Light, sweet crude for February delivery fell $2.85 to $41.75 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe. Trading was closed Thursday for New Year's Day.

The contract rose $5.57 on Wednesday, the last trading day of 2008, to settle at $44.60 after Russia threatened to cut off natural gas supplies to Ukraine. Russia followed through with that threat Thursday, though both countries pledged they would keep supplies to the rest of Europe flowing.

....

In other Nymex trading, gasoline futures fell 6.20 cents to $1.00 a gallon. Heating oil dropped 5.57 cents to $1.39 a gallon while natural gas for February delivery slid 4.7 cents to $5.58 per 1,000 cubic feet.

http://news.yahoo.com/s/ap/oil_prices

[ozymandius]

4. World markets kick off 2009 brightly

LONDON – World stock markets kicked off the new trading year brightly Friday as European and Asian indexes rose, though trading volumes remained light with many traders not back at their desks until next week.

The FTSE 100 index of leading British shares was up 39.70 points, or 0.9 percent, at 4,473.87, while Germany's DAX was 68.80, or 1.4 percent, higher at 4,878.00. France's CAC-40 rose 41.90 points, or 1.3 percent, to 3,259.87.

Earlier, Hong Kong's Hang Seng Index led what Asian markets were open higher, vaulting 655.33 points, or 4.6 percent, to 15,042.81. More than half of Asian's markets, including Japan's Nikkei, remained.

....

The perky early tone in Europe and Asia was expected to largely carry through into the opening U.S. session of the year. Futures markets were predicting that the Dow Jones industrial average would open 87 points, or 1.0 percent, higher at 8,727 but that the broader Standard & Poor's 500 index would dip 5.4 points to 894.70.

http://news.yahoo.com/s/ap/20090102/ap_on_bi_ge/world_markets

[UpInArms]

5. dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DX&v=i

Last trade 81.435 Change -0.188 (-0.24%)

Fed And Dollar Look For Policy Alternatives To Support Growth In 2009

http://www.dailyfx.com/story/special_report/special_reports/Fed_And_Dollar_Look_For_1230759239358.html

The US economy and its volatile currency have come to the end of 2008 at a major crossroads. At its last policy meeting, the Federal Open Market Committee lowered the benchmark lending rate for the last time to target a range between zero and 0.25 percent range. And, while this technically leaves the policy group the option to officially drop the rate to zero; this is not likely a move they will make as they look to avoid the stigma attached to a zero interest rate policy (ZIRP).



<snip>

A Closer Look At Financial And Consumer Conditions

Market conditions seem to have improved considerably over the past few months. However, this may be more a reflection of year-end position squaring and liquidation than a genuine improvement in sentiment. Indeed, low liquidity has clearly snuffed out high volatility across the spectrum of asset classes, which has further supported congestion in the hard-hit credit and equity markets. When investors and policy makers return for the new year, they will find financial conditions are actually in a worst state than they were through the final quarter of 2008. With banks hording cash, capital shrinking and consumer wealth plunging, there are far greater difficulties ahead.

The US and global recessions are deepening going into the new year. The initial credit shock of 2008 has had its impact on banking, financial institutions and housing, However, the damage won’t end there. The next, major collapse in this unfolding crisis will be consumer spending. Accounting for some 70 percent of overall growth in the US, the future of domestic consumption will determine whether the world’s largest economy is looking at a mild slump in GDP or full-blown depression. And, looking at recent data, the outlook is bleak. Unemployment is soaring and consumer confidence is at record lows. Certainly, the bottom is not yet in sight.

...more...

Euro Pares Earlier Losses Despite Further Contraction In Manufacturing

http://www.dailyfx.com/story/bio1/Euro_Pairs_Earlier_Losses_Despite_1230893653940.html

The Euro started 2009 under heavy selling pressure falling to 1.3839, the lowest level in two weeks. The single currency would pare the majority of it earlier losses reaching above 1.3950 despite the final December PMI manufacturing reading being revised lower to 33.9 from a preliminary reading of 34.5. The indicator fell from November’s print of 35.6 which was the lowest since record keeping began in 2006, adding to the growing concerns that the downturn in the region may be longer then economists initially predicted.

As manufacturing activity continues to contract and the regions labor markets continue to weaken, pressure will mount for the ECB to continue easing rates. President Trichets comments that the past three rate cuts have yet been realized by the economy shows tat the central bank is reluctant to take rates lower. In the past the MPC has expressed fear of being trapped if they take rate too low, which would leave them trapped without further recourse. Yet, the cries are mounting for more action from the central bank and another rate cut is very likely at their next policy meeting on January 15th. Therefore, we may see bearish Euro sentiment continue as interest rate expectations decline.

The Pound drop from its daily high of 1.4812 to a low of 1.45020 before consolidating as U.K. manufacturing and housing sectors showed further weakness. Indeed, mortgage approvals fell from 32,000 to 27,000, which was the lowest since record keeping began in 2002. Additionally, house prices fell another 2.2% in December according to HBOS. Meanwhile, the December PMI manufacturing reading despite unexpectedly improving to 34.9 from a record low of 34.5 the month prior, contracted for the seventh straight month. Tight credit markets continue to cripple demand which may force the BoE to take further measures to loosen lending standards. Therefore, markets are expecting a rate cut from 50-100 bops on Thursday which could lead to further Sterling weakness as we near the policy decision. .

The U.S. December ISM manufacturing indicator is expected to show a decline to 35.4 from 36.2, which would be the lowest in almost three decades. Waning domestic demand combined with sharp declines in overseas orders has led to a deep contraction in the sector. The troubles of the U.S. auto maker’s will only add to the declining activity as they are shutting plants in order to avoid bankruptcy. The dollar could weaken on the data if fundamental factors are driving price action today. Also, If equity markets continue the bullish momentum from the last day of trading ion 2008, then we may see the greenback weaken on increasing risk appetite as safe haven flows leave U.S. Treasury’s seeking higher returns abroad.

...more...

[ozymandius]

11. I love those tables.

They concisely present major economic drivers' conditions without being too wonkish.

[UpInArms]

14. Happy New Year, Ozy!

Here's to hoping that we (this country) can have a better future than the past 8 years :toast:

[ozymandius]

17. And a Happy New Year to you, UpInArms.

We really have much to celebrate even if it's just a change of scenery in the Oval Office.

:toast: :woohoo:

[RetailSlave]

6. Good morning Ozy!

Waving wildly from the back row... Thanks again for all you do.

I don't know how much of an economic indicator this might be, but in my 2 retail jobs, I've worked exactly ONE 6 hour shift since the day after Christmas; every other shift has been cancelled at the last minute. Ah, the joys of retail life... I've got to find out if I'm eligible for unemployment (doesn't seem logical since at least nominally I have 2 jobs); I can't live on $48 a week gross income.

[ozymandius]

10. Good morning RetailSlave!

:donut: :donut: :donut:

Thank you for the cheer. Your situation cannot be equivocated beyond distressing. I am very sorry about your hours lost. Go ahead and file for unemployment if the hours dry up altogether. I have been in your situation before, unemployed for six months a couple of years ago. Any little bit will help while you rethink what to do.

[Tansy_Gold]

40. Some states give partial benefits if your hours/$$$ fall below

a certain level.

APPLY.

Get anything while/if you can.


We're all in this together,


Including






Tansy Gold

[ozymandius]

7. Factories slash output and jobs around world

BEIJING (Reuters) – Factories in China and India joined much of Europe in slashing output and jobs at a record pace in December, another sign the biggest emerging markets were wilting under the recession gripping industrialized nations.

Factory activity surveys in the United States were also expected to show a steeper contraction in December, as demand collapses in the Western countries that developing nations rely on as export markets.

Economists and policymakers had seen China, Russia, India and Brazil, with their vast markets and rising wealth, as the engines of growth that could save the world from recession. Those hopes are fading fast and forecasts are getting gloomier.

http://news.yahoo.com/s/nm/20090102/bs_nm/us_financial

[UpInArms]

8. Wall St closes out worst year since Depression

http://www.reuters.com/article/businessNews/idUSN02ELLSNA20090102?feedType=RSS&feedName=businessNews

excerpt:

* On the macro front, investors braced for the Institute of Supply Management index, due at 10:00 a.m. EST. The ISM will likely report that its index of national factory activity dropped to 35.5 in December from 36.2 in November, according to the median forecast of 69 economists polled by Reuters. A reading below 50 indicates a contraction in the sector. The reading for November was the weakest since 1982.

* The U.S. government on Wednesday paid out the first $4 billion in emergency loans to support General Motors Corp (GM.N) but a parallel rescue payment for Chrysler LLC was on hold until the new year. Chrysler said it remained in talks with the U.S. Treasury to finalize its own $4 billion loan agreement and expected to receive its share of the funding soon.

* Bank of America Corp (BAC.N) completed its purchase of Merrill Lynch & Co and Wells Fargo & Co (WFC.N) finished buying Wachovia Corp, the latest sea changes in a transformed banking industry facing dire economic times ahead.

* LyondellBasell, the world's third-largest petrochemical company, is considering filing for Chapter 11 bankruptcy protection as it tries to restructure its debt, a company spokeswoman said.

* Viacom (VIAb.N) and Time Warner Cable (TWC.N) reached an agreement in principle on Thursday that avoided a blackout that would have prevented more than 13 million U.S. subscribers from seeing popular TV shows like "Dora the Explorer" and "The Daily Show with Jon Stewart."

* U.S. album sales slid for a seventh time in eight years in 2008 as growth in the digital arena, one of the few bright spots in the ailing music industry, slowed, according to data issued on Wednesday. Total album sales fell 14 percent to 428.4 million units during the 52-week period ended December 28, according to retail data collected by tracking firm Nielsen SoundScan.

* Wall Street ended its worst year since the Great Depression on Wednesday after the credit crisis and a dreadful economic outlook left investors questioning their faith in stock markets. For the year, the Dow fell 33.8 percent, for its bleakest year since 1931; the S&P skidded 38.5 percent; and the Nasdaq posted its worst year ever, with a 40.5 percent drop.

...more at link...

[UpInArms]

9. City National subject of bailout review: report

http://www.reuters.com/article/businessNews/idUSTRE50112W20090102?feedType=RSS&feedName=businessNews

(Reuters) - The Treasury Department's inspector general is examining the decision to award bailout funds to City National Corp's (CYN.N) City National Bank, the Los Angeles Times reported.

The newspaper said the inquiry is not based on any suspected wrongdoing by City National. Instead, the investigators see the review as a case study into how the Treasury Department is implementing its program to infuse $250 billion into the nation's banking system and why certain institutions were selected to participate, the paper said.

In a statement to the paper, the inspector general's office said it wanted to know "specifically how financial institutions are determined to be eligible for participation" and that it was "looking at the application and selection of one institution based in Southern California."

The statement, issued by Richard Delmar, counsel to the inspector general, did not name the bank, the paper said. City National was identified as the target of the inquiry in briefings on Capitol Hill last month, the LA Times said, citing congressional officials who were not authorized to discuss the matter.

The Treasury and City National could not be immediately reached for comment by Reuters.

In October 2008, the Treasury said it would infuse $395 million in capital to City National as part of the government's $250 billion banking bailout program.

...a bit more...

[UpInArms]

12. After worst year ever, commodities may lag recovery

http://www.reuters.com/article/ousiv/idUSTRE5000MZ20090102?sp=true

SINGAPORE (Reuters) - Commodities, until six months ago the darling of investors and an out-performing asset class, sealed their worst year on record with accelerating losses in the fourth quarter of the year, data showed on Thursday.

Industrial metals, crude oil and even grains took it on the chin as the world fell into recession and investors sold anything liquid or risky to cover deepening losses elsewhere or sock away cash for a brighter day, wiping out six years of nearly unbroken gains in the space of months.

Commodities led the charge lower over the second half of the year with more than 50 percent plunge since July, double the decline in the U.S. Dow Jones stock index .DJI, and some analysts say they will probably lag a recovery that is now expected to materialize only in the second half of next year.

"At the moment, confidence in the commodity market is short, definitely short. That confidence would start to be restored when we start to see a rebound in equity markets again," said Mark Pervan, head of Australia & New Zealand Bank Research.

"There are a lot of nervous investors, who in some cases probably are not prepared to wade back in until they see more signs of things recovering."

The five commodity indexes used most heavily by investors to gain exposure to raw material prices -- tracking energy, metals and agriculture markets -- showed an average 40.5 percent dive in the fourth quarter, taking the full-year fall to 42.35 percent.

Indices collapsed by more than two-thirds from their record highs in early July, suffering a 25 percent average loss in the third quarter -- the first negative performance for commodities after four straight positive quarters that had handed investors some of their best returns in 35 years.

...more...

[ozymandius]

13. Paulson 'blames global imbalances for credit crisis'

LONDON (AFP) – Outgoing US Treasury Secretary Henry Paulson said that a failure to address the rise of emerging markets and resulting imbalances was partly to blame for the global financial crisis, according to an interview published Friday.

Paulson told the Financial Times that imbalances between fast-growing nations which save, such as China, and those who spent were at the root of the problem.

He said that in the years leading up to the crisis, savings from nations such as China and oil exporters -- at a time of low inflation and booming trade and capital flows -- exerted downward pressure on yields everywhere.

This pushed down interest rates and drove investors to riskier assets, sowing the seeds of a global credit bubble that extended beyond the US subprime or high-risk home loan market and eventually burst.

http://news.yahoo.com/s/afp/20090102/ts_afp/financeeconomybritainuspaulson_090102113633

---

What a load of shit. This is another way of saying, "Those other nations just had too much money. So what are we going to do except borrow it and engage in rabid speculation." Jeebus! Take responsibility for your own shitty monetary policies for once!

[UpInArms]

16. these people have a sense of entitlement to no accountability

in ways that I have never witnessed.

:crazy:

[natrat]

21. yea nothin to do with the trillion to one leverage they were using

[ozymandius]

34. “No One Saw It Coming” — REALLY?

This is a patently absurd comment. Anyone who makes it — and there have been lots and lots of people saying as much – reveal themselves as either clueless or liars or both.

Today’s WSJ has two articles about the many warnings that were out there. Not just on Blogs, but amongst fund managers, Wall Street Analysts, academics, and Fed economists.

The most striking example is found in Justin Lahart’s column, Mr. Rajan Was Unpopular (But Prescient) at Greenspan Party:

“It was August 2005, at an annual gathering of high-powered economists at Jackson Hole, Wyo. — and that year they were honoring Alan Greenspan. Mr. Greenspan, a giant of 20th-century economic policy, was about to retire as Federal Reserve chairman after presiding over a historic period of economic growth.

Mr. Rajan, a professor at the University of Chicago’s Booth Graduate School of Business, chose that moment to deliver a paper called “Has Financial Development Made the World Riskier?”

His answer: Yes.

Mr. Rajan quickly came under attack as an antimarket Luddite, wistful for old days of regulation. Today, however, few are dismissing his ideas. The financial crisis has savaged the reputation of Mr. Greenspan and others now seen as having turned a blind eye toward excessive risk-taking.”

What exactly was it that professor Rajan was warning about? It reads like a laundry list of precisely what has hit the financial markets:

1. Incentives were horribly skewed in the financial sector;
2. Credit-default swaps generated big returns, but failed to consider the risk if defaults occurred;
3. Banks were holding a portion of the credit securities they created, putting the banking system itself at risk.
4. Banks might lose confidence in one another;
5. If that occurred, the interbank market could freeze up. This would cause a full-blown financial crisis.

As we now know, that is precisely what occurred.

more...

http://www.ritholtz.com/blog/2009/01/no-one-saw-it-coming-really/

[ozymandius]

15. Obama to meet with congressional leaders on economy

WASHINGTON (Reuters) – President-elect Barack Obama plans to meet on Monday with Democratic and Republican congressional leaders to discuss their legislative agendas including how to jump-start the struggling U.S. economy, a congressional aide said on Thursday.

Obama will meet with House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid and then they will hold a second meeting with Republican leaders Rep. John Boehner and Sen. Mitch McConnell, the aide said on the condition of anonymity.

http://news.yahoo.com/s/nm/20090102/ts_nm/us_usa_obama_pelosi

[UpInArms]

18. Stolen Madoff statue returned with note attached

http://www.reuters.com/article/newsOne/idUSN0134022920090101

NEW YORK, Jan 1 (Reuters) - A statue stolen last month from Wall Street financier Bernard Madoff's Florida home has been returned undamaged, and with a note attached, to a country club where the accused swindler is a member, Palm Beach police said on Thursday.

The attached note read: "Bernie the Swindler, Lesson: Return stolen property to rightful owners. Signed by The Educators," according to police.

"We don't know who that is," Sgt. Chris Proscia told Reuters. "We think it was done just to prove a point."

Madoff, a former Wall Street fund manager, is accused of running a $50 billion scam that ensnared wealthy investors, banks and charities around the world.

...more...

[tclambert]

19. For the first time in a while, I found some good news:

"Auto sales are up, GM dealers report" http://www.mlive.com/businessreview/tricities/index.ssf/2009/01/auto_sales_are_up_gm_dealers_r.html

OK, it's just from the Saginaw News and may not represent a widespread trend. Still, one can hope.

[tclambert]

22. Or maybe not . . .

"GM, Chrysler May Lead Sales Slide to Cap 16-Year Low (Update1)"

Jan. 2 (Bloomberg) -- General Motors Corp. and Chrysler LLC, bailed out by $13.4 billion in federal loans last month, probably led a decline in December U.S. auto sales that capped the industry’s worst year since 1992.

Sales dropped 48 percent from a year earlier at Chrysler, 41 percent at GM and 33 percent at Ford Motor Co., based on the average estimates of six analysts surveyed by Bloomberg. Toyota Motor Corp. may report a 40 percent slide and Honda Motor Co. may say its total was down 36 percent, Brian Johnson, a Barclays Capital analyst in New York, said in a Dec. 31 note to investors.

Auto sales tumbled more than 25 percent each month since September as the credit crunch reduced access to loans and consumer confidence fell amid a weakening economy. With demand for large pickup trucks and sport-utility vehicles damped earlier this year by record fuel prices, analysts expect an annual total of slightly more than 13 million autos, the fewest in 16 years.

“Consumers are scared,” said Erich Merkle, an auto analyst in Grand Rapids, Michigan, for consulting firm Crowe Horwath LLP. “People that are going to be laid off won’t be buying cars, and even those that are working are likely delaying purchases.”

U.S. jobless rolls reached a 26-year high in the week ended Dec. 20 . . .

http://www.bloomberg.com/apps/news?pid=20601087&sid=aQ2lR2bJe3w0&refer=home


Oh, crap.

[UpInArms]

20. U.S. steel industry urges "buy America" recovery plan

http://www.reuters.com/article/domesticNews/idUSTRE5010C220090102

WASHINGTON (Reuters) - The ailing U.S. steel industry is pressing President-elect Barack Obama for a public works plan that could be worth $1 trillion over two years to boost flagging demand for U.S.-made steel, the New York Times reported in Friday's editions.

Daniel DiMicco, chairman and chief executive of Nucor Corp, a giant steel maker, told the paper the industry was asking the incoming administration to "deal with the worst economic slowdown in our lifetime through a recovery program that has in every provision a 'buy America' clause."

The industry supports building mass transit systems, bridges, electric power grids, schools, hospitals and water treatment plants -- all of which would require large amounts of steel.

"We are sharing with the president-elect's transition team our thoughts in terms of the industry's policy priorities," Nancy Gravatt, a spokeswoman for the American Iron and Steel Institute, was quoted as saying.

Obama, who is to be sworn in as president on January 20, has not revealed details of his soon-to-be-announced plan for spurring the weakest economy since the Great Depression more than 70 years ago. Aides have indicated most of the package will probably go into infrastructure spending rather than tax breaks.

...more...

[tclambert]

24. ITA. Buy American. Buy local. Support your neighbor.

And for a big public works project, let's rebuild New Orleans. It is a national disgrace to have let that project languish for over three years. GDGB.

[UpInArms]

25. GDGB - and soon good riddance too!

GR and GDGB

[Tansy_Gold]

41. Can we do at least some of it with recycled materials? n/t

.

[UpInArms]

23. To cut costs, firms give 'vacations' without pay - a 17 year high

http://toledoblade.com/apps/pbcs.dll/article?AID=/20090102/BUSINESS07/901020346

NEW YORK - Here's the vacation no one wants, courtesy of the recession: Forced time off without pay.

Financially struggling universities, factories, and even hospitals are requiring employees to take unpaid "furloughs." This year, the number of such workers hit a 17-year high.

"If they do it once, I think it's easier for them to try to do it again," said Carrie Swartout, a state-payroll employee who researches traumatic brain injuries at the private, nonprofit University of Maryland Medical Center.

Maryland is requiring unpaid time off for 67,000 of its 80,000 employees, saying the furloughs will save an estimated $34 million during the fiscal year.

Chrysler LLC, General Motors Corp., and Ford Motor Co. extended their annual holiday shutdowns, typically the last two weeks of the year.

The moves will idle tens of thousands at the automakers, including at Chrysler's Toledo Jeep Assembly complex GM's Toledo Powertrain, as well as at their suppliers.

The temporary layoffs are "kind of employment purgatory, but it's better than the alternative," said Carl Van Horn, a professor of public policy at Rutgers University. He said the moves are a typical response to decreasing demand in a recession, although this round is slightly worse than in past bad recessions.

Of 10.3 million unemployed workers in November, roughly 1.2 million were unemployed because of temporary layoffs, according to figures from the Bureau of Labor Statistics.

The last time the number was so high was in February, 1991, when 1.4 million were unemployed because of temporary layoffs. As a proportion of the total work force, workers on temporary layoff are roughly 1 percent, nearly the same now as 17 years ago. At some companies, the furloughs are a prelude to a permanent layoff.

...more...

[tclambert]

27. That one spun me around three times. Good, bad, good, bad, good, bad.

Bottom line, we need more workers working more hours to get the economy rolling again. There's not much wrong with this economy that wouldn't disappear if we added ten million more jobs.

By our calculations in a previous discussion, we think George Bush owes us about 11 million. I do believe the new CEO who takes office in 18 days will add jobs. The question is how many and how fast. Hint for new CEO: more and faster is better.

[ozymandius]

30. ZellMiller furloughed state employees when he was governor in 1990.

It was later declared 'unconstitutional' but it saved the state a bunch of money. I remember morale was very low back then.

[DemReadingDU]

26. The Lending Lunacy Continues as GMAC Gives Out More Bad Loans

1/1/09 The Lending Lunacy Continues as GMAC Gives Out More Bad Loans

This past week the Treasury used $5 billion of funds from the Troubled Asset Relief Program (TARP) to purchase senior preferred equity in GMAC, the financing arm of General Motors (GM). GMAC reacted immediately to deploy the funds by lending to new car buyers with credit scores as low as 621.

According to GMAC President Bill Muir, "We got the TARP money yesterday and today we're out in the marketplace offering it to consumers".

AutoNation (AN) Chief Operating Officer Michael Maroone was equally elated, noting that "We want to get out there and let people know that we can get them credit now. There are plenty of people with credit scores in the 600's who want to buy cars".

GMAC was masterful in showing its appreciation for taxpayer dollars by its quick lending, thus avoiding the criticism the banks received for not lending out their TARP funds. The Treasury will, no doubt, show its appreciation by supplying GMAC with billions more as soon as possible.

The Treasury should reflect on the following points before advancing GMAC additional funds.

* A credit score in the low 600's is sub prime. You earn such a score by paying late and taking on obligations in excess of your ability to repay. A low 600 credit score reflects a financially stressed consumer, typically with little in the way of savings and in need of constant new credit to pay off old credit. Any consumer in this category should think twice about buying an expensive new car. What they should really be doing is trying to save some money, pay down some debt and visit the used car lot.

* The free market was not providing car loans to sub prime borrowers for the reasons listed above. The TARP fund is essentially subsidizing car loans, at taxpayer expense, so that customers who couldn't buy a new car based on their low income or credit score, can now do so.

* AutoNation's Mr Maroone is certainly correct when he states that there are plenty of sub prime borrowers eager for loans. I doubt very much that Mr Maroone would personally lend money to a sub prime borrower because he knows better. Lending taxpayer bailout money, on the other hand, is apparently a great idea. Have we already forgotten the results of lending to sub prime mortgage borrowers?

more...
http://seekingalpha.com/article/112902-the-lending-lunacy-continues-as-gmac-gives-out-more-bad-loans

[tclambert]

29. Another one that spins me. Increasing car sales is good. Making bad loans is bad.

Repo'ing cars is kinda bad. Residual value of cars isn't declining as fast as in housing. GM makes money on the car sale. GMAC may lose on defaulted car loans. But they can repo the car. The now used car should be worth more than the balance on the loan. Should be. So GMAC shouldn't lose on the defaulted car loan. The consumer is out the down payment. This definitely hurts the the guy with poor credit who can't pay on the car loan.

If the economy was rising and the guy with a 621 credit score could reasonably expect his circumstances to improve and make it possible to pay off the car loan, maybe this would make sense. With job losses still mounting, GMAC may be miscalculating here.

I don't know. Too many variables, not enough data for me.

[InkAddict]

33. "A credit score in the low 600's is sub prime.

You earn such a score by paying late and taking on obligations in excess of your ability to repay."

OTOH, you earn it now by taking care of your personal obligations to house, feed, educate, and look after family members welfare while being robbed in broad daylight by the corporate "person" too big to fail and without accountability of its officers. It's furthermore disgusting and obscene that, when criminal activities are found out, our government would rather have a piece of the action than lock up these enemies of the State.

[UpInArms]

28. U.S. budget pinch presses arms makers to cut costs

article is dated December 17 - but I didn't see it - hope I'm not repeating something that is old news to everyone else -

http://www.reuters.com/article/AerospaceandDefense08/idUSTRE4BH05I20081218

WASHINGTON (Reuters) - Mounting budget pressures worsened by the global financial crisis are giving new urgency to calls for the Pentagon and its top suppliers to rein in the runaway costs of nearly every major arms program.

Top corporate executives, military officials and analysts told the Reuters Aerospace and Defense Summit this week that seven years of sharp growth in U.S. defense spending were ending and future budgets would flatten out at a high level.

But they said the incoming administration of President-elect Barack Obama had already emphasized its intent to scrutinize major weapons programs closely and make reforms.

Defense Secretary Robert Gates told U.S. troops in Kyrgyzstan last week there would be no major cuts in the defense budget for the "next year or two," but "the significant increases that we've seen in recent years are likely to come to a screeching halt."

Gates, asked to stay on by Obama, said the Pentagon would clearly face "tougher expectations of us in terms of how we spend what we get."

Jim Albaugh, head of Boeing Co's (BA.N: Quote, Profile, Research, Stock Buzz) $30 billion-plus a year defense business, said some of Boeing's biggest programs, including the U.S. Army's $160 billion Future Combat Systems modernization and missile defense, would face tough reviews.

<snip>

"You can't fix the acquisition system unless you can find some way of restraining Congress from micromanaging programs," he said, noting that lawmakers had few incentives to cut programs and make them more efficient. "They want to hear about how you're going to keep their constituents employed."

...more...

[ozymandius]

31. Euro-zone manufacturing contracts at record pace

LONDON – Manufacturing activity contracted for the seventh month running in December for the countries using the euro, falling at its sharpest rate for at least 11 years, a closely-watched survey found Friday. The figures reinforced expectations that the European Central Bank will cut interest rates again this month.

The monthly purchasing managers' index was revised down to 33.9 in December from the initial estimate of 34.5, down from 35.6 the previous month.

http://news.yahoo.com/s/ap/20090102/ap_on_bi_ge/eu_economy

---

A number below 50 indicates contraction.

[Lasher]

32. 2008 was the worst year ever for the S&P 500

I posted this in GD yesterday & thought you market watchers might be interested.

The S&P 500 closed on December 31 at 903.25, ending the last full calendar year with George W Bush as President. Now it's time to reflect once more on Wall Street performance over the years.



GWB just presided over a 2008 loss of 38.5%, by far the worst annual performance of the S&P 500 since its inception in its present form on March 4, 1957. The previous record was set in 1974, with a 29.56% loss under Presidents Nixon and Ford. Former second place and now third was the only other year that suffered a percent loss into the twenties, with a 23.37% loss in 2003 under The Decider.

[ozymandius]

35. And 2009 gets rolling...

9:31
Dow 8,815.26 Up 38.87 (0.44%)
Nasdaq 1,578.57 Up 1.54 (0.10%)
S&P 500 905.64 Up 2.39 (0.26%)
10-Yr Bond 2.178% Down 0.066
NYSE Volume 248,246.002
Nasdaq Volume 47,904,285.156

09:17 am : S&P futures vs fair value: +1.90. Nasdaq futures vs fair value: +4.50. The major indices are positioned to start the first trading session of 2009 flat-to-modestly higher, according to stock futures. Energy is expected to be an early laggard as crude oil futures run into selling pressure. Losses in crude prices are being pared, however. Oil has rallied roughly $2 per barrel in the last half hour to trade 1% lower at $44 per barrel. Investors will keep an eye on steel companies as well; the industry is one of the latest to state its want for a government-backed stimulus, according to reports. The Wall Street Journal reported that Viacom (VIA) and Time Warner Cable (TWC) reached a new programming agreement, though the final details have yet to be announced. In other deal news, Bank of America (BAC) completed its acquisition of Merrill Lynch, and Wells Fargo (WFC) completed its takeover of Wachovia Bank.

[UpInArms]

38. 10:17 EST and the markets sticks its thumb in your eye

Dow 8,817.17 40.78 (0.46%)
Nasdaq 1,582.00 4.97 (0.32%)
S&P 500 906.22 2.97 (0.33%)
10-Yr Bond 2.183% 0.061

NYSE Volume 908,731.018
Nasdaq Volume 220,106,453.125

who cares about jobs! who cares about the manufacturing index! screw you people! we're having a freakin' party!

[natrat]

42. inflation deflation or both?

"One of the most bothersome questions from 2005 to 2007 used to be whether the Untied States would ultimately submit to inflation or deflation. This is actually the wrong question. Many analysts in my view are incorrect in their conclusion that the US suffers from a powerful deflation episode, since they endorse the wrong definition, confuse effect with cause (as usual), do not properly monitor the money flow, and then draw improper conclusions from prices. They suffer from a type of Keynesian Tunnel Vision. They are confused, and fail to adapt certain key measures after the financial sector highjacked the entire national system in the last two decades."

http://www.marketoracle.co.uk/Article8030.html

[ozone_man]

47. Sounds like it's written by a gold bug.

If gold goes to $650 will he abandon his argument? :)

[Festivito]

43. Debt: 12/30/2008 10,553,014,664,691.60 (DOWN 1,099,240,540.40) (Ity-bitty again.)

(I don't yet if there will be a 12/31 report. Happy new year to all.)

= Held by the Public + Intragovernmental(FICA)
= 6,322,765,588,713.41 + 4,230,249,075,978.19
UP 55,730,362.68 + DOWN 1,154,970,903.11
(NOTE: Excel 2007 cannot handle ten-trillion plus to the penny. It zeroes the penny.)

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: 3 or 4 dollars per billion in a 300-Million person America.
If every American, man, woman and child puts in $3.33 each THAT'S 1B$.
A family of three: Mom, Dad, Child: THEIR SHARE IS TEN BUCKS in a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is a federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)
(I hate those end to end dollars to the moon and back, or years to spend $100/second. Just say'n)
If you read this and have a suggestion or comment, good or bad, I'd love to see it.

ANALYSIS:
There were 22 reports in the last 30 to 32 days.
The average for the last 22 reports is -4,916,374,505.27.
The average for the last 30 days would be -3,605,341,303.87.
The average for the last 32 days would be -3,380,007,472.38.
There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 61 reports in 91 days of FY2009 averaging 8.66B$ per report, 5.81B$/day.

PROJECTION:
GWB** must relinquish the presidency in 21 days.
By that time the debt could be between 10.5 and 10.7T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
12/30/2008 10,553,014,664,691.60 GWB (UP 4,824,818,868,510.03 so far since Bush took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 0.00 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/09/2008 +000,031,558,514.41 ------------*******
12/10/2008 +000,087,731,393.17 ------------*******
12/11/2008 -019,940,834,952.80 -
12/12/2008 -000,182,958,692.63 ---
12/15/2008 +027,986,876,028.13 ------------********** Mon
12/16/2008 +000,172,636,444.49 ------------********
12/17/2008 -000,200,107,551.80 ---
12/18/2008 -057,877,925,051.10 -
12/19/2008 -000,369,261,235.72 ---
12/22/2008 -000,588,542,244.94 --- Mon
12/23/2008 +000,074,940,615.00 ------------*******
12/24/2008 -000,121,597,338.38 ---
12/26/2008 -036,328,594,643.92 -
12/29/2008 -000,737,189,520.41 --- Mon
12/30/2008 +000,055,730,362.68 ------------*******

-87,937,537,873.82 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $888,382,861,432.53 in last 103 days.
That's 888B$ in 103 days.
More than any year ever, except last year, and it's 87% of that highest year ever only in 103 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 103 DAYS NOT 365.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3666032&mesg_id=3666273

[Festivito]

51. Debt: 12/31/2008 10,699,804,864,612.13 (UP 146,790,199,920.53) (End of year, 46 debt, 100 FICA.)

(Last day of 2008. Big adjustments. I changed calculations and formats to hold pennies of ten-trillion dollar amounts. I hope it is all correct.)

= Held by the Public + Intragovernmental(FICA)
= 6,369,318,869,476.54 + 4,330,485,995,135.59
UP 46,553,280,763.13 + UP 100,236,919,157.40
(NOTE: Excel 2007 cannot handle ten-trillion plus to the penny. It zeroes the penny.)

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: 3 or 4 dollars per billion in a 300-Million person America.
If every American, man, woman and child puts in $3.33 each THAT'S 1B$.
A family of three: Mom, Dad, Child: THEIR SHARE IS TEN BUCKS in a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is a federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)
(I hate those end to end dollars to the moon and back, or years to spend $100/second. Just say'n)
If you read this and have a suggestion or comment, good or bad, I'd love to see it.

ANALYSIS:
There were 22 reports in the last 30 days.
The average for the last 22 reports is 848,588,370.41.
The average for the last 30 days would be 622,298,138.30.

There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 63 reports in 92 days of FY2009 averaging 10.72B$ per report, 7.34B$/day.

PROJECTION:
GWB** must relinquish the presidency in 20 days.
By that time the debt could be between 10.7 and 10.8T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
12/31/2008 10,699,804,864,612.10 GWB (UP 4,971,609,068,430.53 so far since Bush took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 675,079,967,699.70 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/10/2008 +000,087,731,393.17 ------------*******
12/11/2008 -019,940,834,952.80 -
12/12/2008 -000,182,958,692.63 ---
12/15/2008 +027,986,876,028.13 ------------********** Mon
12/16/2008 +000,172,636,444.49 ------------********
12/17/2008 -000,200,107,551.80 ---
12/18/2008 -057,877,925,051.10 -
12/19/2008 -000,369,261,235.72 ---
12/22/2008 -000,588,542,244.94 --- Mon
12/23/2008 +000,074,940,615.00 ------------*******
12/24/2008 -000,121,597,338.38 ---
12/26/2008 -036,328,594,643.92 -
12/29/2008 -000,737,189,520.41 --- Mon
12/30/2008 +000,055,730,362.68 ------------*******
12/31/2008 +046,553,280,763.13 ------------**********

-41,415,815,625.10 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,035,173,061,353.06 in last 104 days.
That's 1,035B$ in 104 days.
More than any year ever, except last year, and it's 102% of that highest year ever only in 104 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 104 DAYS NOT 365.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3668507&mesg_id=3668950

[DemReadingDU]

52. (UP 146,790,199,920.53). That's 1,035B$ in 104 days.

Just wow!

Thanks for keeping track of these amounts daily for us.

[specimenfred1984]

45. Wall St. analcysts forecast an average gain of 17% for the S&P 500 in 2009

Yes, that's the propaganda for the day and sure enough the market is being propped in tandem with the lie. The lie can be found over at Yahoo/BS financial news.

-----The bullish consensus is based largely on the following:

* U.S. equities are now fairly valued on a cyclically adjusted earnings basis and downright cheap relative to Treasuries.
* The market is "due" to bounce, even if only in dead-cat fashion. (Still, the Dow's worst ever year, down 53% 1931, was followed by another 23% decline in 1932.)
* Based on the "first in, first out" theory and massive government stimulus already enacted and more expected, the U.S. economy is expected to emerge from recession before the rest of the word (although you wouldn't know it from today's ISM report.)
* In addition, investors globally have become underweight U.S. stocks — a record $233.5 billion was pulled from equity mutual funds in 2008, the FT reports — amid the rush into international stocks generally and emerging markets specifically. As badly as the U.S. markets performed in 2008, most international bourses fared far worse, with the notable exception of the U.K.'s FTSE 100, which "only" lost 31%. -----

[natrat]

46. herding sheep and loading up shorts for the trip down to dow 5000

[ozymandius]

49. Why print this?

The market is "due" to bounce, even if only in dead-cat fashion.

Investing in a 'dead cat bounce', to me, has always mean that you're throwing yourself into a volatile situation. Chances are really good that value investments will get screwed.

[specimenfred1984]

50. Because we're all supposed to be dead cat bounce bargain hunting disaster capitalists

always looking for the next "play", how to cash in on misery, how to make money on civilian slaughter and torture, how to invest for ourselves and pull ourselves up by our bootstraps while "Madoffs" are enabled to steal billions. We're all just savvy as hell, greed is good, regulation is bad, hard work pays off, no bleeding hearts allowed this is business, unions are evil, outsourcing created jobs, find a loophole, now's not the time to protest, I've got money so who cares!

I'm an ebay millionaire, a real estate foreclosure genius, I'm too big to fail, I need a $35 million apartment, a Palm Springs country club membership, I sell swaps, derivatives and multi-tranched insurance, I'm the smartest guy in the room!

[ozymandius]

48. End of the day: traders on three-day bender

Dow 9,034.69 Up 258.30 (2.94%)
Nasdaq 1,632.21 Up 55.18 (3.50%)
S&P 500 931.80 Up 28.55 (3.16%)
10-Yr Bond 2.416% Up 0.172
NYSE Volume 4,075,754,500
Nasdaq Volume 1,464,044,875

The stock market opened 2009 with strong gains, breaking above key resistance levels despite a lack of news or data to guide trading.

Stocks encountered a bit of selling pressure in the first few minutes of action, but spent the rest of the session trending higher. Each of the major indices finished near session highs.

The gains, like in recent sessions, were broad-based and without concerted leadership, which signals many investors may be ready to scoop up bargains after a dreary 2008.

However, this week’s near-7% advance came amid very low trading volume. Only twice in the past seven sessions has trading volume on the NYSE exceeded 1 billion shares. Such low trading volume suggests a lack of conviction in the broader market.

Nonetheless, more than 90% of stocks in the S&P 500 closed with gains.

Financials lagged for the entire session, but still gained 1.5%.

Wells Fargo (WFC 29.29, -0.19) and Bank of America (BAC 14.33, +0.25) reversed early losses to help pull the sector higher. The firms announced they completed their acquisitions of Wachovia Bank and Merrill Lynch, respectively.

In other corporate news, media companies Viacom (VIA 21.15, +1.03) and Time Warner Cable (TWC 22.21, +0.76) reached a new programming agreement, though specifics have yet to be announced.

Energy stocks sported some of the biggest gains, closing 4.3% higher after oil prices reversed early losses. Oil futures were down as much as 8%, but closed 3.5% higher near $46.20 per barrel. The gains come on top of the prior session’s 14% advance. Crude gained more than 20% this week.

The rebound in oil prices follows weeks of weakness stemming from concerns regarding economic headwinds.

Such economic weakness was reflected in the worst ISM manufacturing reading since June 1980. The December reading came in at 32.4%. A number below 50% indicates a contraction.

A weak reading was expected, though, so investors were able to look past the dismal reading and send the major indices to their best levels in over a month.

The major indices did encounter some resistance late in the session, but the Dow was still able to close above 9,000, while the Nasdaq finished above 1,630, and the S&P 500 finished above 930.
..Nasdaq 100 +4.3%. ..S&P Midcap 400 +2.4%. ..Russell 2000 +1.3%.