From[BRIEFING.COM]: Stocks concluded a whipsaw session with modest gains after market participants stepped in to provide short-term support to stocks.
During the session the stock market had been down as much as 3%, while the Dow dropped roughly 200 points to cross 8000 for the first time since its November bear market low.
At their session lows both indices were down 12% from their January high. With a sense stocks were becoming oversold, buyers stepped in to provide support.
Eight of the 10 sectors finished higher. Telecom (-1.1%) and financials (-5.1%) were the only sectors that failed to make their way into positive territory.
Financials led the session's initial losses. The sector had been down as much as 8.3% as JPMorgan Chase (JPM 24.34, -1.57), Bank of America (BAC 8.32, -1.88), and Citigroup (C 3.83, -0.70) led losses.
JPMorgan Chase reported fourth quarter adjusted earnings of $0.07 per share, which was better than the break-even level that Wall Street was expecting. Still, the results were far below the $0.86 per share earned one year ago. JPMorgan also reminded investors just how shaky macro conditions remain when it reported it added $4.1 billion (pretax) to loan loss reserves.
Meanwhile, The Wall Street Journal reported Bank of America is close to receiving additional federal aid to assist in the acquisition of Merrill Lynch, even though the bank has already received $25 billion in federal funds. The need for additional capital led many investors to question whether the bank can maintain its dividend. The stock had been down more than 20% to reach new multiyear lows, but finished off those levels. At BAC's current share price, the stock carries a dividend yield of 15.3%.
Large-cap tech stocks like Research In Motion (RIMM 49.24, +4.14) and Qualcomm (QCOM 34.80, +1.04) helped the Nasdaq outperform the other headline indices this session. Apple (AAPL 83.38, -1.95), however, traded as a laggard. Apple fell under pressure after its CEO, Steve Jobs, said he is taking a medical leave of absence until June.
Motorola (MOT 4.43, +0.32) was one of the latest companies to issue a cautious outlook and announce additional job cuts. Motorola expects fourth quarter revenue will likely range from $7.0 billion to $7.2 billion, which falls short of the $7.5 billion consensus estimate. The company will cut roughly 4,000 employees this year. That's in addition to the 3,000 cuts already announced.
Initial jobless claims for the week ending Jan. 10 totaled 524,000, which is up 54,000 week-over-week, and more than the 503,000 claims that were expected. Continuing claims stand at 4.497 million, which is less than the 4.62 million continuing claims that were expected. The prior reading was increased slightly to reflect 4.612 million continuing claims. Although encouraging at first glance, the continued claims improvement is likely a function of many people having exhausted their jobless claims benefits.
In other economic news, the December Producer Price Index fell 1.9% month-over-month, which wasn't quite as bad as the 2.0% downturn that was expected. Excluding food and energy, producer prices were up 0.2% month-over-month. Economists expected a 0.1% increase. |
