YAHOO [BRIEFING.COM] : The
stock market kicked off the week on a strong note after investors were pleased
with news that President-elect Obama plans to launch the largest infrastructure
investment program in 50 years and word that progress is being made on a
financial relief package for U.S. automakers.
Obama said over the weekend
that he will focus on making sure an economic stimulus is large enough to get
the economy moving, noting that he can't worry about the fiscal deficit in the
short term. Obama said he aims to create a least 2.5 million new jobs by 2011
and launch the largest U.S. infrastructure investment since the 1950s.
Ford (F 3.32, +0.60) and General Motors
(GM 4.81, +0.73) rallied on reports that the government was
making progress on a bailout package. Late in the session, it was reported that
U.S. Democrats had sent a $15 billion rescue plan to the White House for
consideration.
In corporate news, more job
cuts were announced due as the poor economic environment takes a toll. 3M
(MMM 57.38, -2.47) issued downside earnings guidance for fiscal year
2008 and 2009 and said it will cut 1,800 jobs in the fourth quarter. Dow
Chemical (DOW 20.41, +1.41) plans to lay off 11% of its global
full-time workforce, or 5,000 positions, close 20 facilities and reduce its
contractor workforce by 6,000.
Privately-held Tribune Company
filed for Chapter 11 bankruptcy protection. The weak economic environment
combined with a high amount of debt proved to be too much for the Chicago-based
company. The Tribune Company will continue to operate its media business as it
restructures. The Chicago Cubs franchise, including Wrigley Field, is not part
of the Chapter 11 filing.
On a positive note, McDonald's
(MCD 60.89, -1.83) reported another solid month of sales as consumers
flock to the fast food giant's relatively inexpensive offerings. November
comparable sales increased 7.7% worldwide and 4.5% in the U.S.
All of the ten sectors posted
a gain. Defensive sectors such as consumer staples (+0.1%), utulities
(+0.8%) and healthcare (+1.1%) underperformed on a relative
basis.
Cyclical sectors materials
(+7.7%) and energy (+5.7%) saw the most buying interest, benefiting
from Obama's potential stimulus plan and a spike in commodity prices. The
financial sector (+6.9%) also outperformed as investors showed an increase
willingness to take on risk.
Overseas markets rallied
on news of the potential U.S. stimulus and on reports that other countries
are considering stimulus packages of their own. The DJ Euro Stoxx 50 rose
8.8% and the MSCI Asia Index rose 7.9%.
The strength in world equity
markets and a steep 1.8% drop in the dollar sparked buying interest in
commodities (+5.2%). Oil rose 7.9% to $44.05 per barrel.
In the end, the S&P 500
rose 3.8% in volume that was modestly above average. The index has posted a gain
in nine of the last ten sessions and is up 22.8% from its multi-year low
reached on Nov. 21.DJ30 +298.76 NASDAQ +62.43 NQ100 +4.0% R2K +4.4% SP400 +3.8%
SP500 +33.63 NASDAQ Dec/Adv/Vol 779/1991/2.32 bln NYSE Dec/Adv/Vol
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