YAHOO [BRIEFING.COM]: Tuesday marked a choppy day of trade as
investors digested $800 billion in government efforts to shore up consumer
lending and several economic reports. The S&P 500 settled with a 0.7% gain
after trading up as much as 2.0% and down as much as 2.0%.
In an effort to reduce the cost and increase the availability of
credit for purchasing a house, the Federal Reserve created a program that will
purchase up to $600 billion in direct obligations and mortgage-backed
securities of housing-related government-sponsored enterprises.
Separately, the Fed created a new facility aimed at reducing the
cost and increasing the availability of auto loans, student loans, credit
cards, and small business loans. The Federal Reserve will lend up to $200
billion in its Term Asset-Backed Securities Loan Facility to help facilitate
the issuance of asset-backed securities.
Stocks related to asset-backed securities and housing benefited
from the news. Homebuilders spiked 20% on hopes that lower mortgage rates will
spur increased demand. SLM Corp (SLM
9.62, +1.72), which provides education finance, surged 22%.
In economic news, third quarter real GDP was revised to a 0.5%
annual rate of decline from a 0.3% rate, which met expectations. Third quarter
personal consumption expenditures was revised to -3.7%
from -3.1%.
Consumer confidence rose by are large-than-expected amount in
November, but remains at an extremely depressed state as the economic turmoil
takes a toll on sentiment. November consumer confidence rose 6.1 to 44.9 from
October when confidence fell to an all-time low of 38.8, according to the
Conference Board. Economists expected confidence of 39.5
The November Richmond Fed Manufacturing Index, a regional
manufacturing survey, fell to -38 from -26 in October, which was worse than the
expected reading of -27. This represents contraction in manufacturing in the
Home prices continue to show weakness, with prices in 20 major
metro areas falling 17.4% in September compared to the previous year, according
to S&P/Case-Shiller.
Eight of the ten sectors posted a gain. Materials (+3.2%),
financials (+2.5%) and telecom (+2.1%) saw the most buying interest
The tech sector (-1.5%) underperformed, with Hewlett-Packard (HPQ 33.61, -2.09) dropping 6% despite
reporting fiscal fourth quarter earnings and fiscal year 2009 guidance that was
in-line with the company's preannouncement last week. Cisco (CSCO 15.38, -1.02) was a laggard after
announcing that it will shut down most of its
Small- and mid-cap stocks outperformed their large-cap
counterparts, with the Russell 2000 advancing 1.5% and the S&P 400 gaining
1.9%.
In commodity trading, oil prices dropped 6.4% to $51.00 per barrel.
Long-term Treasuries rallied, with the 10-year note climbing more
than two points to send its yield down to 3.08% and the 30-year bond rose three
points to send its yield down to 3.61%.DJ30 +36.08 NASDAQ -7.29 NQ100 -1.0% R2K
+1.5% SP400 +1.9% SP500 +5.58 NASDAQ Adv/Vol/Dec
1529/2.46 bln/1195 NYSE Adv/Vol/Dec 2153/1.88 bln/1005