It was a dizzyingly volatile session on Wall Street today. After initially ticking higher at the start, stocks retreated amid growing concern that Uncle Sam's efforts to rescue the financial system won't be enough. The U.S. government this morning announced that it would invest billions of dollars in Bank of America (BAC), which slashed its dividend and reported its first quarterly loss in 17 years before the opening bell. Also contributing to financial-sector woes were shares of Citigroup (C). The stock hit a new low after the company reported a worse-than-expected net loss in the fourth quarter, and announced plans to realign into 2 businesses. In addition, the Street digested the latest round of discouraging economic data, with the Federal Reserve reporting that the output of the nation's factories plunged 2.0% in December. However, thanks in part to January options expiration, the equities market erased earlier losses, with most stocks ending in positive territory.
After bouncing in a range of more than 230 points today, the Dow Jones Industrial Average (DJIA 8,281.22) finished the session with a gain of 68 points, or 0.83%. Only 6 of the Dow's 30 components ended in the red, led by financial concerns Bank of America and J.P. Morgan Chase (JPM). Pacing the advancing issues were defensive plays Boeing (BA) and 3M Corporation (MMM). For the week, the Dow backpedaled about 3.7%.
After briefly grazing the 830 level in early afternoon trading, the S&P 500 Index (SPX 850.11) turned higher. The broad-market barometer finished the session with a gain of 6 points, or 0.76%. For the week, the SPX declined roughly 4.5%. Finally, in-line earnings from Intel Corp. (INTC) helped fuel the afternoon rally for the Nasdaq Composite (COMP 1,511.84), which ended the session 17 points, or 1.16%, higher, but closed the week with a loss of 2.7%.
Turning to equities in focus, a double dose of downgrades inspired put trading on Akamai Technologies (AKAM) ... A pair of price-target cuts plagued casino concerns Wynn Resorts (WYNN) and MGM Mirage (MGM) ... Bearish brokerage action also caught up to Corn Products International (CPO) ... ITT Educational Services, Inc. (ESI) hit a new high in the wake of the proposed government stimulus package ... Clinging to support were shares of Internet auctioneer eBay (EBAY) ... and today's Quote of the Day comes from Barack Obama spokesman Robert Gibbs, commenting on the President-elect's "butterfingers" moment. After the soon-to-be commander in chief dropped his beloved smartphone on an airport tarmac, Gibbs quipped:
"That may have solved his Blackberry dilemma, right? Forget the lawyers!"
But these weren't the only headlines hitting the Street today. Click on the links below for our Daily Market Blog coverage of:
And, in case you missed it, Jocelynn Drake shined the Options Spotlight on medical mogul Merck & Co. Inc. (MRK). Click here to watch the video.
For today's activity in crude oil, gold futures, options, and more, turn to page 2.
Crude futures initially resumed yesterday's journey into the red, plunging in the wake of the latest report from the International Energy Agency (IEA). The Paris-based commodities firm slashed its 2009 oil demand estimate by 1 million barrels per day, and reduced its 2008 demand forecast by 70,000 to 85.8 million barrels per day. The lowered guidance mirrors that from the Organization of Petroleum Exporting Countries (OPEC) yesterday, with the cartel predicting that global oil consumption will recede by 200,000 barrels per day in 2009.
However, oil futures erased earlier losses on the back of a short-covering rally. Traders that shorted February oil bought the contract before February-dated futures expire on Tuesday. Against this backdrop, crude oil for February delivery added $1.11, or 3.1%, to finish at $36.51 per barrel. For the week, the front-month contract shed 10.6%.
Elsewhere, gold futures broke their 4-session losing streak today, with the malleable metal rallying amid a weakening dollar. After the Labor Department reported that consumer prices declined in December, the greenback lost ground against most of its foreign rivals. What's more, precious metals consultancy GFMS Ltd. said that the ongoing economic downturn, combined with lingering threats of inflation, could fuel gold prices well above $1,000 an ounce during the course of 2009. Though the yellow metal lost more than 2% for the week, February-dated gold settled with a gain of $32.60, or 4.04%, to end at $839.90 an ounce.
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