Stocks have bounced back sharply today following some positive comments from Federal Reserve Board Chairman Ben Bernanke and Citigroup CEO Vikram Pandit. The Dow Jones Industrial Average soared to a triple-digit gain out of the gate and is holding strong.
Bernanke kicked things off this morning when he stressed that major financial institutions would not be allowed to fail given the fragile state of financial markets and the global economy. In a speech in Washington, Bernanke repeated that until the banking system recovers, a sustainable economic recovery will "remain out of reach." "In particular, the continued viability of systemically important financial institutions is vital to this effort," Bernanke said in a speech to the Council of Foreign Relations. In addition, Bernanke laid out his thinking on a fresh approach to the regulation of financial markets.
In other news, Citigroup (C: sentiment, chart, options) was profitable during the first 2 months of 2009, and its capital position is "strong," according to CEO Vikram Pandit. In a memo distributed around the company, Pandit said the bank is enjoying the best quarter-to-date performance since the third quarter of 2007. The preferred exchange it announced nearly 2 weeks ago is expected to make Citi the strongest capitalized large U.S. bank as measured by tangible common equity and Tier 1 ratios, Pandit added. The positive comments have helped lift the shares of C more than 27% today. Other banking issues have followed suit, with Bank of America (BAC) up more than 24.8% and JPMorgan Chase (JPM) gaining nearly 16%.
In other news hitting the Street today, chain-store sales for the week ended March 7 fell 0.9% from the year-earlier period, according to a survey released by the International Council of Shopping Centers and Goldman Sachs. On a week-over-week basis, sales rose 0.2%.
In earnings news, the Kroger Co. (KR: sentiment, chart, options) announced that its fourth-quarter earnings rose to $349 million, or 53 cents per share, while total sales rolled in at $17.3 billion. Analysts had predicted a profit of 51 cents per share and sales of $18.3 billion.
Dick's Sporting Goods (DKS: sentiment, chart, options) posted a quarterly loss of $104 million, or 93 cents per share. On an adjusted basis, Dick's earned 55 cents per share, excluding an impairment charge related to the integration of Golf Galaxy and Chick's Sporting Goods. Sales in the quarter fell 0.4% to $1.2 billion. The consensus estimate was for a profit of 54 cents and sales of $1.2 billion.
Elsewhere, United Technologies (UTX: sentiment, chart, options) warned that it plans to slash 11,600 jobs globally and spend an extra $600 million for restructuring, bringing the total restructuring costs for the year to $750 million. The company said that more cuts may be needed in 2009, depending on production needs. Earnings guidance has been revised to a range of $4.00 to $4.50 per share.
Finally, Wal-Mart Stores (WMT: sentiment, chart, options) was smacked with a downgrade from "buy" to "hold" at Citigroup, with the broker saying a bill before the House of Representatives would greatly simplify the process of union formation, limit the ability of employers to caution employees against unionization, and impose several restrictions on the bargaining process.
At last check, the Dow Jones Industrial Average (DJIA -- 6,810.45) is up 263.4 points, or 4.02%. The Dow has pulled back slightly from its intraday high of 6,823.03, which marked a gain of 275.98 points. The Dow is currently struggling with overhead resistance at its declining 10-day moving average. All 30 of its components are in the black, with JPMorgan Chase, Chevron, and 3M Company enjoying some of the heaviest gains.
The S&P 500 Index (SPX -- 706.34) has jumped nearly 30 points, or 4.4% higher today, while the tech-laden Nasdaq Composite (COMP -- 1,329.56) has increased 60.9 points, or 4.8%.
The rally in stocks has chased investors from gold, as the yellow metal is currently down 1.5% at $904.20 an ounce. Gold has already dipped below the $900-an-ounce level in trading today. Meanwhile, the price of crude oil has tacked on 1.9% to trade at $47.63 per barrel.
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