WORLD> America
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WORLD> America
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Wall Street jumps on Obama stimulus plan
(Agencies)
Updated: 2008-12-09 08:34 The Russell 2000 index of smaller stocks rose 20.29, or 4.40 percent, to 481.38. Stocks that rose outpaced those that fell by about 4 to 1 on the New York Stock Exchange, where consolidated volume came to 6.42 billion shares compared with 6.03 billion shares traded Friday. Paper gains in US stocks over the two sessions came to $800 billion, as measured by the Dow Jones Wilshire 5000 Composite Index, which reflects nearly all stocks traded in America. While big moves in stocks have continued in recent weeks the trading has much of the time been more orderly. There have been some gyrations, like a 680-point drop in the Dow on Dec. 1, but some market observers contend that the market is slowly forming a bottom. Stocks are up sharply from Nov. 20, when the benchmark S&P 500 finished at its worst level since April 1997. Since then, the S&P 500 is up 20.9 percent, the Dow is up 18.3 percent and the Nasdaq is up 19.4 percent. Bond prices slipped Monday as some investors put money back into stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.72 percent from 2.70 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, was 0.02 percent, unchanged with late Friday and still indicating a high degree of investor uneasiness. The dollar was mostly lower against other major currencies, while gold prices rose. David Kelly, chief market strategist at JPMorgan Funds, said professional investors are being drawn to the market by cheap stock prices and a sense that while the economy is weak now it will eventually begin to regain its strength. "The reality in the economy is it's getting worse but eventually the economy will turn around," he said. "Even if the economy is lousy in 2009 stocks are a long-term investment and are cheap." But Scott Fullman, director of derivative investment strategies with WJB Capital, warned that the advance should be treated cautiously. He said credit still remains tight around the world, and that there are still a number of other worries hanging over the market. "I'd be very cautious about jumping in with both feet and expecting what could be a Santa Claus rally going into the New Year," he said. "The fact is, we're not seeing the credit markets opening up, we're not seeing buying of the distressed debt, and that leads to additional worries for stocks." With little in the way of economic data to trade on, investors closely monitored corporate news for direction. Among the automakers, GM rose 85 cents, or 21 percent, to $4.93, while Ford rose 66 cents, or 24.2 percent, to $3.38. Chrysler isn't publicly traded. Consumers hungry for a deal boosted worldwide sales at McDonald's Corp.'s established locations by 7.7 percent in November. The company said that US same-store sales -- or sales at locations open at least a year -- rose 4.5 percent. The company fell $1.80, or 2.9 percent, to $60.92. Tribune Co. filed for bankruptcy Monday. The privately held owner of the Los Angeles Times and Chicago Tribune, other newspapers and the Chicago Cubs and Wrigley Field, is struggling with $13 billion in debt. A steep slump in advertising revenue has hurt the company. Most of its debt stems from a complex transaction in which the company was taken private by real estate mogul Sam Zell last year. Oil prices bounced off four-year lows after OPEC's president suggested the group could surprise investors with a large production cut later this month. Light, sweet crude rose $2.90 to settle at $43.71 a barrel on the New York Mercantile Exchange. The advance in stocks follows a global rally as investors took heart from signs the world's largest economies are redoubling efforts to revive growth. In China, government officials this week are meeting to discuss possible new steps to expand the $586 billion stimulus that is already in place. Hong Kong's Hang Seng index vaulted 8.7 percent to its highest close in seven weeks, while Japan's Nikkei 225 average rose 5.2 percent. Major European bourses also showed big gains. Britain's FTSE-100 climbed 6.2 percent, Germany's DAX jumped 7.6 percent, and France's CAC-40 surged 8.7 percent. |
