Stocks Move Higher in New Year
Major indexes rallied as traders looked ahead in the pattern of a dismal 2008, and despite more worse-than-expected economic data
By Ben Steverman
Stocks started the new year by a burst of optimism by dint of. posting solid gains on Friday. On the chief commercial appointed time of 2009, investors were looking ahead, trying to forget 2008, the worst year for public funds since the 1930s.
Economic data released Friday reminded investors why the market has provided such dismal returns.
The U.S. ISM manufacturing index cut down to 32.4 in December, a worse-than-expected decline from the 36.2 reading in November. “So the first piece of data for the new year started where the old data left off,” Action Economics says.
“The recession continued to deepen in December according to purchasing managers for U.S. manufacturing firms,” wrote John Ryding and Conrad DeQuadros of RDQ Economics. They noted merely three recessions be the subject of had worse readings for ISM manufacturing — 1948 to 1949, 1973 to 1975, and 1980. “The case for a ponderous global fiscal stimulus continues to grow,” they added.
On Friday, the 30-stock Dow Jones industrial medial sum was up 258.3 points, or 2.94%, to 9,034.69. The broader S&P 500 index gained 28.55 points, or 3.16%, to 931.8. The tech-heavy Nasdaq composite index added 55.18 points, or 3.5%, to 1,632.21.
Meanwhile, European and Asian markets rallied Friday, though some markets remained closed and mercantile book worldwide was lamp.
Despite the rally, the light turnover in the emporium suggests “a number of investors remain skeptical about committing funds to equities given that 2008 was the worst year for the [Dow] and S&P 500 since the 1930s,” said S&P MarketScope.
On the New York Stock Exchange, 26 stocks were higher for every five that fell. On the Nasdaq, the ratio was 20 to 7 positive.
For 2008, the Dow Jones Industrial mean proportion dropped 33.8%, the broader S&P 500 index fell 38.5% and the Nasdaq composite had its worst year at all times, plunging 40.5%.
Wells Fargo (WFC) and Bank of America (BAC) both officially completed greater acquisitions in the new year. BofA closed its $19.4-billion buyout of Merrill Lynch, and Wells Fargo finished its acquisition for $12.7-billion of Wachovia.
GMAC, the fiscal arm of General Motors (GM), will get a $5 billion first in importance enema in exchange for 5 million preferred shares gainful 8% be of importance to. GMAC disclosed the terms Friday. GM shares jumped 14% on Friday.
Among other shares in the recent accounts, BorgWarner (BWA) received notice from TRC Capital Corp. to corrupt 2.5 million shares, or about 2.16% of BorgWarner’s shares outstanding, at $20 each. Shares closed on Wednesday at nearly $22, and the firm recommends stockholders not offer their shares in reply to the offer.
Time Warner Cable (TWC) and Viacom (VIA) reached a deal in principle to renew Time Warner’s carrying of MTV cable networks. The agreement avoids a blackout of 19 Viacom channels on the cable system.
Gramercy Capital Corp. (GKK) announced it would not pay a dividend for the fourth quarter of 2008, an effort to retain needed capital. Dividends paid earlier in the year satisfy the firm’session distribution requirements as a veritable order investment trust, Gramercy said.
Abigail Adams National Bancorp (AANB) will be acquired through Premier Financial Bancorp in a stock deal valued at $10.9 million.
In other markets, bonds continued to fall in excellence after a rout on Wednesday. The 30-year influence was off 3-19/32 to 133-11/32 for a yield of 2.82%, while the 10-year note was off 1-26/32 to 111-23/32 for a yield of 2.41%.
Oil prices initially slipped Friday after more traders felt Wednesday’s 14% rally was excessive. However, oil rebounded and in NYMEX trading, crude was up $1.66 to $46.26 per barrel.
Gold was lower at 877.60 The U.S. dollar index rose to 81.84.
