YAHOO [BRIEFING.COM]: Stocks
staged a solid advance without the help of any major news items or encouraging
economic data. Each of the major indices rallied in the final minutes of
trading, finishing at session highs.
With news flow slow,
participants focused on word that GMAC, the partly-owned financing arm of General Motors (GM 3.80, +0.20), is receiving $5 billion
worth of senior preferred equity from the U.S. Treasury. Another $1
billion is expected to make its way into GMACâs hands since
Treasury is lending General Motors money to participate in GMACâs
rights offering.
The new funds are expected to
help generate new auto loans, aimed at attracting buyers. Such a move
would complement recent efforts by Treasury and Federal Reserve to increase the
availability of consumer loans.
A lack of buyers and tighter
credit conditions continue to weigh on the housing market. According to
the S&P/Case-Shiller Composite Index, October home prices were down 18%
year-over-year. That is the largest drop on record.
Plummeting home prices and
broader economic headwinds are taking their toll on consumer confidence.
According to the U.S. Conference Board, consumer confidence dropped more than
expected to an all-time low in December.
Stocks fell to session lows at
the same time the consumer confidence report was released, but quickly snapped
back to spend the entire session in the green.
Financials (+4.1%) led the
late charge. JPMorgan Chase (JPM 31.01, +1.23) and Wells Fargo (WFC 28.80, +0.97) were the sector's best
performers. The two outfits have found favor among investors since they
avoided many of the toxic assets that crippled other banks and financial outfits.
The assets have been so toxic that The Wall Street Journal suggested
banks may face their first overall quarterly loss since 1990.
Strong gains were also had by
the materials sector. Rohm and Haas (ROH 59.37, +6.03) rebounded from the
prior sessionâs loss after reports indicated the terms of its
merger agreement with Dow Chemical (DOW 15.55, +0.23) are unlikely to be
renegotiated.
The deal was questioned when a
multibillion partnership between Dow and a Kuwaiti petrochemical outfit fell
through. That prompted Standard & Poor's and Moody's to lower their
credit rating on Dow.
Integrated oil companies
(+1.8%) provided leadership to the energy sector for the second straight
session. They helped the sector climb from a 0.9% loss to finish 1.8% higher.
Energyâs recovery
was also helped when oil prices pulled off their session lows. Crude
futures were down more than 5%, but finished closer to 2% lower at around
$39.20 per barrel.
The session's gains were
broad-based with all 10 economic sectors advancing. Nearly 95% of the
companies in the S&P 500 closed higher.
The gains came on light
trading volume, though, as many investors remain on vacation, and trading
desks continue to be lightly staffed. For the fifth straight session
less than 1 billion shares traded hands on the NYSE. The trend will
likely continue through the week since the U.S. indices will be closed for
another holiday on Jan. 1, which is New Year's Day. Tomorrow,
Dec. 31, is a full trading day.DJ30 +184.46 NASDAQ +40.38 SP500 +21.22
NASDAQ Dec/Adv/Vol 918/1951/1.44 bln NYSE Dec/Adv/Vol 591/2548/954 mln