STOCK MARKET WATCH, Wednesday September 26

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday September 26, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 482 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2455 DAYS
WHERE'S OSAMA BIN-LADEN? 2167 DAYS
DAYS SINCE ENRON COLLAPSE = 2128
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

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U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES

---

AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON September 25, 2007

Dow... 13,778.65 +19.59 (+0.14%)
Nasdaq... 2,683.45 +15.50 (+0.58%)
S&P 500... 1,517.21 -0.52 (-0.03%)
Gold future... 738.80 -0.50 (-0.07%)
30-Year Bond 4.89% +0.01 (+0.18%)
10-Yr Bond... 4.61% -0.01 (-0.22%)






GOLD, EURO, YEN, Loonie and Silver

---

PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

---

Read more: du

[ozymandius]

1. Market WrapUp

De-Industrialization and the 'Nordstrom's -- Wal-Mart' Economy
BY FRANK BARBERA, CMT

For the last few years, there has been an ill wind blowing for anyone who would care to notice. Yes, we know that the combination of rising asset prices and a lower cost of money has at times produced the illusion of an economic nirvana, as the aggregate level of wealth within our society has continued to increase. With that rise in wealth cast against relatively stable consumer prices and the outreach of capitalism to a global economy, we have benefited from the excess capacity in the means of production, as cheap foreign labor has been a boon to the industrialized economies. It has allowed many of us to devote an increased portion of our incomes to the purchase of luxury items and personal services, leading to an ever-expanding array of such services. Yet, through this process, what we could term the ‘de-industrialization” of the west, the economies of many nations have been transformed. First came the collapse in manufacturing jobs, as capitalism outsourced its productive needs to the emerging economies of the third world. The capacity to produce and create widgets was deemed less worthy of capital investment, and so, yielded the rise of the Services economy.

-chart-

Yet over the years, as more and more jobs have been outsourced and eliminated through advances in Technology, even the service sector has matured, tracing out a series of steadily lower peaks with each cycle over the course of the 1990’s and the new millennium. As wealth became more concentrated in the hands of a smaller and smaller percentage of the upper echelon income strata, services catering to that niche meant intensified competition for the best class of customers. Along the way, wealth creation became tied and inextricably connected to the function of ‘lending’ as opposed to ‘investment.” Finance became the driving force for the new economy and within finance, the principle agent of growth became asset inflation. It has been a long evolution, with the finance economy beginning in the realm of traditional lending and morphing into the gross excesses of speculative structured finance.

-cut-

For the US, never before has the country seen its Labor Force contract during the course of an economic expansion. Never before has an economic expansion failed to generate any gains in real wages, and never before has the US Economy been so dependent on a single driver named Housing. Today, and over the last few years, Housing has taken center stage, not only as the object of speculative fever during the boom, spawning shows like “Flip that House,” “Design to Sell” and “Curb Appeal,” but also as the key underlying driver for growth in the US.

Unlike the past, when increases in investment in capital production would drive job creation, which would in turn raise incomes, and put upward pressure on housing prices, this economy of the last few years has been the “Backwards Economy,” where “cheap money” led to speculative investment and rising prices, with rising prices begetting more speculative investment, triggering the hiring of armies of contractors, designers, and then ultimately selling agents and mortgage finance people.

All of these jobs were created in response to higher prices, which were fundamentally disconnected to any discernable change in the enhanced productive capacity for the overall economy. We have lived through the age of asset inflation led “growth,” which as we are finding out now is really just “Asset Inflation” and very little lasting growth at all. So it is today, as layoffs mount and payroll numbers are revised down, that confidence is on the wane.

http://www.financialsense.com/Market/wrapup.htm

[ozymandius]

2. Today's Reports

8:30 AM Durable Orders Aug
Briefing Forecast -4.5%
Market Expects -3.5%
Prior 6.0%

10:30 AM Crude Inventories 09/21 -
Briefing Forecast NA
Market Expects NA
Prior -3874K

http://biz.yahoo.com/c/e.html

[UpInArms]

14. U.S. Aug. durable-goods orders fall 4.9% vs. -4.5% expected

01. U.S. durable-goods orders up 1.7% year-to-date
8:30 AM ET, Sep 26, 2007 - 2 minutes ago

02. U.S. Aug. durable-goods inventories fall 0.1%
8:30 AM ET, Sep 26, 2007 - 2 minutes ago

03. U.S. Aug. aircraft orders fall 41%
8:30 AM ET, Sep 26, 2007 - 2 minutes ago

04. U.S. Aug. durable-goods shipments fall 1.6%, most in a year
8:30 AM ET, Sep 26, 2007 - 2 minutes ago

05. U.S. Aug. core capital equipment orders fall 0.7%
8:30 AM ET, Sep 26, 2007 - 2 minutes ago

06. U.S. Aug. durable-goods orders ex-transportation fall 1.8%
8:30 AM ET, Sep 26, 2007 - 2 minutes ago

07. U.S. Aug. durable-goods orders fall 4.9% vs. -4.5% expected
8:30 AM ET, Sep 26, 2007 - 2 minutes ago

[ozymandius]

30. This cannot be true! The market went positively nuts.

Wait! Scratch that. This is Wall Street we're talking about.

[ozymandius]

3. Oil prices rise in Asian trading

SINGAPORE - Oil prices rose in Asian trade Wednesday, gaining back a small portion of losses the last three sessions that were driven by easing supply concerns.

Light, sweet crude for November delivery rose 22 cents to $79.75 a barrel in Asian electronic trading on the New York Mercantile Exchange by midafternoon in Singapore.

On Tuesday, the contract fell $1.42 to settle at $79.53 a barrel. The drop marked the third consecutive day of decline following eight straight sessions in which oil futures hit new records.

-cut-

The recent three-day decline in prices ignited debate among analysts over whether the move is a correction in a bull market or the beginning of a long-term decline in crude prices.

There was little news affecting oil prices Tuesday as oil prices continued to drop from near $84 a barrel last week, analysts said.

If anything, the oil-related stories would seem to support higher prices. An opposition group in Nigeria, a major oil producer, has ended a cease-fire and said it will resume attacks on oil installations. Analysts also expect the government to report Wednesday that oil inventories fell last week.

http://news.yahoo.com/s/ap/oil_prices

[ozymandius]

4. Economy sends off warning flares

NEW YORK - Crumbling consumer confidence and slumping home sales could prove to be a bad combination for retailers, and for the broader economy going into the holiday shopping season, if the labor market contracts further and chokes off spending, economic data showed Tuesday.

But markets took some heart from the warning signs, hoping that they would goad the Federal Reserve to lower interest rates more.

Worries about jobs and the economy flared in September, driving a key barometer of consumer sentiment to its lowest level in nearly two years, a private research group said.

The bad news was compounded by a report from the National Association of Realtors that sales of existing homes declined for a sixth straight month in August, pushing activity to the lowest point in five years. The Realtors showed a rise in median home prices, but a separate report done by S&P/Case-Shiller said home prices fell 3.9 percent in July in its 20-city index. Economists said that decline was probably a better reflection of where the market stands now.

http://news.yahoo.com/s/ap/20070926/ap_on_bi_ge/economy

[ozymandius]

6. Majority of hedge funds say '08 U.S. recession likely

NEW YORK (Reuters) - A majority of hedge fund managers say a U.S. recession is "very likely" in 2008, but fewer than one in five said an economic slowdown would be bad for their funds, a survey of several-hundred hedge fund managers released on Tuesday found.

Rothstein Kass, a provider of auditing and tax services for funds, said it sponsored the survey that polled 239 hedge fund principals with a median $492 million in assets under management.

More than 61 percent of those polled said they believed a recession was "very likely" in 2008, the survey found.

Still, only 17 percent of those surveyed viewed an economic downturn as bad news for their funds, with some 66 percent suggesting a recession would bring investment opportunities.

http://news.yahoo.com/s/nm/20070925/bs_nm/usa_economy_hedgefunds_dc

[Roland99]

13. They should know. They're behind it all!

Unregulated speculation! Wheeeee!!

[ozymandius]

5. UAW reaches tentative agreement with GM

DETROIT - The United Auto Workers and General Motors Corp. agreed Wednesday to a tentative contract that puts the responsibility for retirees' health care into the union's hands and ends a two-day strike, the first national strike against an automaker in 31 years.

GM and the UAW confirmed that the deal creates a GM-funded, UAW-run trust to administer retiree health care. The two sides gave no other details, but a person briefed on the contract told The Associated Press that it also would give workers bonuses and lump-sum payments. The person requested anonymity because the contract talks are private.

The union said the deal was reached shortly after 3 a.m.

The contract must be reviewed by local UAW presidents and will then be subject to a vote of GM's 73,000 rank-and-file members. The agreement is expected to set a pattern for contracts at Ford Motor Co. and Chrysler LLC.

http://news.yahoo.com/s/ap/20070926/ap_on_bi_ge/auto_talks

[ozymandius]

7. Rock rallies on takeover hopes

London stocks were higher on Wednesday as the banking sector rallied.

Bealeagured mortgage bank Northern Rock was the biggest riser, up 7.9 per cent to 175p, after saying it had received a number of unnamed approaches.

By mid morning, the benchmark FTSE 100 was up 59.9 points, or 0.9 per cent, to 6,456.1, while the mid-cap FTSE 250 added 24.1 points, or 0.2 per cent, to 10,877.3.

Northern Rock confirmed on Tuesday that its controversial £60m dividend payout had been scrapped in the wake of its financial problems. However, there was better news for shareholders as the bank added that it had been approached by several parties about "a variety of potential transactions" that may, or may not, lead to a takeover.

http://news.yahoo.com/s/ft/20070926/bs_ft/fto092620070629425266

[ozymandius]

8. Stocks seen rising after GM-union deal

PARIS (Reuters) - Stock futures pointed to a rise on Wall Street on Wednesday, buoyed by General Motors Corp.'s (GM.N) deal with the United Auto Workers, as well as expectations of more Federal Reserve rate cuts.

-cut-

By 1005 GMT, December Standard & Poor's 500 futures were up 0.3 percent, Dow Jones futures were up 0.2 percent, and Nasdaq futures were up 0.5 percent.

GM shares trading in Frankfurt (GM.F) were up 7 percent.

-cut-

U.S. stocks mostly inched higher on Tuesday, as growing optimism the Fed could slash interest rates overshadowed warnings from two leading retailers and weak economic data.

http://news.yahoo.com/s/nm/20070926/bs_nm/markets_stocks_dc

[JNelson6563]

11. I was noticing.

The upward climb in futures is steady after the UAW/GM deal. I hope it is a decent deal for the workers.

BTW Oz, absolutely LOVED the 'toon! :toast:

Julie

[ozymandius]

9. Rating agencies in the hot seat

LONDON (CNNMoney.com) -- Since the subprime crisis erupted, plenty of blame has been pinned on the big credit rating agencies. Just what went wrong at these firms - and what can be done to stave off another disaster - will be the topic of hearings on Capitol Hill this week.

Lawmakers are expected to grill executives from Moody's and Standard & Poor's, two of the biggest agencies, before the Senate Banking Committee on Wednesday. Securities and Exchange Chairman Christopher Cox is also scheduled to testify. The House Financial Services Committee will follow with a hearing on Thursday.

Critics say the firms failed investors by blessing complex mortgage-backed bonds and other products in turn for big fees. The critics say the agencies were blinded by their close relationship with issuers and their eager pursuit of profits.

But aside from finger-pointing, many say there is little Congress can do to overhaul the rating system, and in turn, restore confidence in the complex debt products that have exploded on Wall Street in recent years.

http://money.cnn.com/2007/09/25/news/companies/rating_agencies_hearing/index.htm?postversion=2007092513

[ozymandius]

10. Good morning folks.

:donut: :donut: :donut:

Since I have a little time - I'll say goodbye gracefully. Rather than disappear. It's time to make a few pennies.

Have fun!

Ozy :hi:

[OnceUponTimeOnTheNet]

12. Good Morning Ozy. K&R nt

[UpInArms]

20. hope all goes well, Ozy

sorry about my "disappearing" for the past couple of days - there just wasn't enough of me to be in all places :D

:hi:

[UpInArms]

15. dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DX&v=i

Last trade 78.502 Change +0.132 (+0.17%)

Dollar Yen Rises On Carry Demand - Is the Spike Temporary?

http://www.dailyfx.com/story/bio2/Dollar_Yen_Rises_On_Carry_1190801765931.html

Japanese retail and institutional demand for yield drove USDJPY back above the 115.00 level as nearly 13 Billion dollars worth of investment trusts are due to launch next Thursday and Friday. However once the trusts are funded yen may strengthen as the latest economic and political news may prove to be constructive for the currency.

On the political front the election of Yasuo Fukuda, a moderate politician with friendly relations with China, should quell some of the unease that settled over the world’s second largest economy during the past two weeks. In the economic news the country’s Trade balance surged by three times the analyst’s estimates as exports of cars and steel led to a surplus of 743.2 Billion yen versus projections of 230 Billion yen.

Yen may also see a boost later on the US session if the US Durables Good number misses its mark. Given yesterday’s horrid consumer confidence readings which fell below the psychologically crucial 100 level, Durable Goods orders may print worse than the -3.0% forecast. Should that occur, markets would most likely begin pricing in anther possible 50bp rate cut from the Fed as early as its next meeting on October 30th.

As the interest differentials continue to compress in the USDJPY the attraction of the carry trade will diminish considerably. Whereas the Fed tightening regime created a virtuous cycle for carry traders, turning every dip into a buying opportunity for the pair, the loosening regime may unleash a vicious cycle with every rally failing at ever lower highs.

...more...

US Fed: Will the 50bp Cuts Help Steer the US Away From Recession?

http://www.dailyfx.com/story/topheadline/US_Fed__Will_the_50bp_1190745249625.html

US Fed: Will the 50bp Cuts Help Steer the US Away From Recession?

Last Tuesday, the FOMC caught investors off guard when they went through with not only a 50bp cut to the federal funds rate, but also a 50bp cut to the discount rate. The policy moves signaled two things: they are worried about a possible recession and they are concerned about the credit crunch. However, the ability of the Fed’s recent policy action to stop a recession is questionable, leaving traders wondering if they will cut rates further even in the face of mounting inflation pressures from food and energy price growth:

Ben Bernanke, Federal Reserve Chairman (Voter)

“Over the month of August the financial market turmoil has effectively tightened credit conditions. That has the risk of making the housing market correction more severe, and it may have other effects on the economy, so we took that action to try to get out ahead of the situation, try to forestall potential effects of tighter credit conditions on the broader economy.” – September 20, 2007

Donald Kohn, Federal Reserve Vice Chairman (Voter)

“In point of fact, Federal Reserve policy makers have not been asymmetrical in intent or actions, in that we have always focused sharply on the macro economy.” – September 21, 2007

Frederic Mishkin, Federal Reserve Board Governor (Voter)

“Controlling inflation is a key principle that has been developed over the decades and continues to guide US monetary policy today.” – September 21, 2007

Richard Fisher, Federal Reserve Bank of Dallas President (Non-Voter)

“If we had maintained the anti-inflationary course we had been following for more than 14 months by holding the federal funds rate at 5.25 percent, I believe we would have risked over steering our course and potentially run afoul of the shoals of unacceptably slow economic growth.” – September 25, 2007

Henry Paulson, US Treasury Secretary

...more...

[UpInArms]

16. Bank of America to cut 4,000 jobs post-LaSalle buy

http://www.reuters.com/article/bondsNews/idUSN2618224820070926

NEW YORK (Reuters) - Bank of America Corp (BAC.N: Quote, Profile, Research) said it will lay off about 2,500 workers in Illinois and 1,500 in Michigan over the next two years in connection with its $21 billion purchase of LaSalle Bank Corp from Dutch bank ABN AMRO Holding NV (AAH.AS: Quote, Profile, Research).

The cuts are intended to help the second-largest U.S. bank save about $800 million by 2009. Following the cuts, Bank of America expects to employ about 8,000 people in Illinois and 2,500 in Michigan. It ended June with 195,675 employees.

"We're buying LaSalle with the goal of growing the combined organization," spokesman Scott Silvestri said. "The layoffs are a necessary first step toward meeting that long-term goal."

On September 14, Charlotte, North Carolina-based Bank of America won approval from the U.S. Federal Reserve to buy LaSalle. The transaction is expected to close in early October.

LaSalle has about $160 billion of assets, 411 branches, 1,500 automated teller machines and 1.4 million customers.

...more...

[UpInArms]

17. Scientific Games to close Texas plant; 350 jobs affected

http://www.reuters.com/article/bondsNews/idUSWNAS488620070926

Sept 26 (Reuters) - Lottery operator Scientific Games Corp (SGMS.O: Quote, Profile, Research) said it plans close its plant in San Antonio, Texas, citing adequate production capacity in its other plants worldwide, and the move will affect about 350 jobs.

The closing is expected to be completed by the end of the year, the company said in a statement. (Reporting by Dhanya Skariachan in Bangalore)

very short blurb - and have we now outsourced all the reporters? :wtf:

[Hugin]

22. Good catch, UIA.

Wow...

[AnneD]

28. Bangalore is a big...

tech center-and they are probably relocating there. It makes the news there but barely a whisper here. Isn't there a minimum number that they have to lay off before they have to announce lay offs.

Bangalore is a nice place but Hyderabad is catching up to them and has a better infrastructure. Hubby and I have been having some great talks about his trip-he is finally on local time now. It takes about 3 days (and a couple of centuries)to adjust when coming back from India.

[UpInArms]

18. US mortgage applications slid last week - MBA

http://www.reuters.com/article/bondsNews/idUSN2646065220070926

NEW YORK, Sept 26 (Reuters) - U.S. home loan applications slumped last week after climbing for three straight weeks, an industry group said on Wednesday, as falling demand for home purchase loans overshadowed a fourth consecutive weekly rise in refinancing requests.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity dropped 2.8 percent to 654.2 in the week ended Sept. 21.

The drop was driven by the seasonally adjusted index of applications for home purchases, which slid 7.3 percent to 418.8, its lowest level since late July, the MBA said.

Weaker demand for applications to buy homes is consistent with other industry and government reports finding sales and prices slumping to multiyear lows.

Sales of existing homes sank in August to a five-year low, while the supply of unsold single-family houses ballooned to an 18-year high, the National Association of Realtors said on Tuesday.

...more...

but wait! wasn't that rate cut supposed to fix all of this?

[UpInArms]

19. GLOBAL MARKETS-US rate view hits dollar; stocks firm

http://www.reuters.com/article/bondsNews/idUSL2683561120070926?sp=true

LONDON, Sept 26 (Reuters) - Expectations of another cut in U.S. interest rates knocked the dollar to a lifetime low against the euro on Wednesday, while easing concerns about the health of British banks buoyed European stocks and supported sterling.

Weaker-than-expected U.S. durable goods data for August, combined with Tuesday's disappointing figures on consumer morale and the housing market, cemented the view the Federal Reserve will cut interest rates again in October to shield the world's biggest economy from a housing slump and financial turbulence.

Lower interest rates are damaging for the dollar as they reduce the yield it offers, but help risky assets including stocks because they support growth.

In addition, the news that no banks bid for cash at the Bank of England's offer of 10 billion pounds of three-month cash loans -- at a penalty rate above the current market rate -- signalled that credit conditions may be easing and gave added support for European stocks.

"On the whole the market seems to have enough liquidity, at least at that price, which is on balance reassuring," said Laurence Mutkin, strategist at Morgan Stanley.

Roger Cursley, UK strategist at Investec, said: "The market is starting to hope that the Fed, having been aggressive once, will continue to be aggressive."

...more...

driving a stake through the heart of the US dollar :cry:

[Gregorian]

27. Canadian dollar is 1.0005. Only moments to go...

It's a sad day.

I predict bad things ahead.

[UpInArms]

21. happy happy joy joy pre-opening blather

09:15 am : S&P futures vs fair value: +6.9. Nasdaq futures vs fair value: +8.8. Futures hold gains with GM-UAW agreement the major factor this morning.

09:01 am : S&P futures vs fair value: +6.8. Nasdaq futures vs fair value: +10.0. Futures push to highest levels of the session despite weak durables data. Ten year note off 5/32 to yield 4.65%.

08:32 am : S&P futures vs fair value: +5.2. Nasdaq futures vs fair value: +8.0. Futures hold steady despite weaker than expected durable goods new orders for August. Total orders were down 4.9%. Excluding transportation, orders were down 1.8%. This followed large orders gains in July, so a sizable drop in this volatile series is not surprising.

08:00 am : S&P futures vs fair value: +6.6. Nasdaq futures vs fair value: +8.2. Futures trade higher in response to news of tentative GM-UAW agreement.

06:33 am : S&P futures vs fair value: +4.3. Nasdaq futures vs fair value: +5.0.

06:28 am : S&P futures vs fair value: -12.8. Nasdaq futures vs fair value: -25.2.

06:27 am : FTSE...6455.10...+58.20...+0.9%. DAX...7799.58...+30.14...+0.4%.

06:27 am : Nikkei...16435.74...+34.01...+0.2%. Hang Seng...26430.29...-121.65...-0.5%.

[Hugin]

23. And they're off!

Index Last Change % change
• DJIA 13837.83 +59.18 +0.43%
• NASDAQ 2696.32 +12.87 +0.48%
• S&P 500 1522.22 +5.01 +0.33%

The market will take full advantage of their new UAW bumperstickers.

[UpInArms]

24. Fed Pumping Early: Fed adds reserves via overnight repurchase agreement

http://www.reuters.com/article/bondsNews/idUSNYD00009720070926

NEW YORK, Sept 26 (Reuters) - The U.S. Federal Reserve said on Wednesday it added temporary reserves to the banking system through overnight repurchase agreements.

Federal funds, the benchmark overnight lending rate to banks, last traded at 4.813 percent, above the Fed's targeted rate of 4.75 percent.

[Hugin]

25. ...

Are they no longer reporting the magnitude of the pumping action?

[AnneD]

26. Morning Marketeers......

:donut: and lurkers. Prag-We need to get something straight-a pump does not work because of it's 'pumping action'. It works because it creates a vacuum-it sucks. Therefore, the FED's are continuing to suck-not pump. Just thought I'd clear up that misconception. ;)

Another point to ponder. I was listening to the events in Burma. The reporters went on and on about the military dick-tater ship. They also said that the unrest started when the government doubled the fuel price overnight. Now, this is used for cooking, etc. This is a very poor country per capita-It ranks near North Korea. And they went on and on about the natural wealth of the people and why they are so poor. But that connection between Burma and North Korea and oppressive governments kept going around in my head. And then, I kept thinking about the decline in our standard of living here in the US. Make no mistake, this decline in our standard of living is now actually so severe it is affecting mortality of our citizens. I started really thinking of how our government is becoming more and more repressive. Right now, our military is subservient to a civilian, but we are setting some dangerous precedents. The wealth is become concentrated in fewer and fewer hands at the same time our rights are being eroded. I don't know if this is like a grand game of chess and this is the strategy, or if this is happenstance, but this is not boding well. I fear that in edition to an economic tipping point, we will be hitting a social tipping point too. I use to hear some folks say that FDR didn't save the poor and middle class of this nation; he save the wealthy from themselves. I wonder if this time we will all be so lucky.

Happy hunting and watch out for the bears.

[Roland99]

29. Defense stocks rally as the Pentagon seeks more Iraq funding (and bulls stats)

Dow 13,867.17 +88.52
Nasdaq 2,697.78 +14.33
S&P 500 1,524.33 +7.12
Oil $80.30 $0.77

10 YR 4.62% +0.01
Gold $735.50 $-3.30

[ozymandius]

31. Closing: GM and UAW cement deal. GM can start losing money again I guess.

Jeebus! I am so damned abrasive. Even I cannot stand being around me.

Dow 13,878.15 Up 99.50 (0.72%)
Nasdaq 2,699.03 Up 15.58 (0.58%)
S&P 500 1,525.42 Up 8.21 (0.54%)
10-Yr Bond 4.62% Up 0.006
NYSE Volume 3,146,398,000
Nasdaq Volume 2,046,351,000

4:25 pm : The major indices traded in positive territory throughout the day in response to news that General Motors (GM 37.64, +3.22) and the United Auto Workers union (UAW) reached a tentative labor agreement. While buying efforts tapered off in the early afternoon, the indices saw a late day push when The New York Times reported that Bear Stearns (BSC 123.00, +8.76) is in serious discussions with outside investors to sell up to a 20% stake in the firm.

The GM and UAW agreement includes the creation of VEBA, an independent trust that will take over $50 billion in retiree health insurance obligations. The deal reportedly also includes an important provision on second tier wages for some incoming employees.

GM stated that the deal "paves the way for GM to significantly improve its manufacturing competitiveness." The agreement must still be ratified by UAW members, but the two-day nationwide strike at GM plants has ended.

With respect to the Bear Stearns speculation, The New York Times named Warren Buffett, Bank of America (BAC 50.41, +0.19), Wachovia (WB 50.64, +0.20), Chinese Construction Bank and Citic Group as parties potentially interested in acquiring the minority stake.

The news caused Bear Stearns shares, and the financial sector to jump noticeably, and carried the the Dow and S&P to their best levels of the day with a half hour to go in the session.

A separate report soon thereafter that SLM Corp. (SLM 45.01, -1.24) has been notified by its suitors that they don't expect to consummate their acquisition took a little wind out of the late-day rally. Still, the indices finished comfortably above the unchanged mark.

Earlier in the session the stock market was unfazed by the report that durable goods new orders dropped 4.9% in August versus the consensus estimate for a drop of 3.5%. July posted a strong 6.1% gain, so an offset was expected.

Meanwhile, the Dept. of Energy reported that crude inventories rose 1.84 million barrels in the latest week. The consensus estimate, according to a Bloomberg survey, predicted a draw of 2.15 million barrels.

Following the bearish announcement, oil prices surrendered a 1.4% gain and traded as low as $78.44. They soon rebounded, though, to end the day up 1.2% at $80.49. The turnaround was attributed to concern that inventory levels are still below year-ago levels despite the latest weekly reading.

All 10 economic sectors ended the day in positive territory, with consumer discretionary (+1.0%), consumer staples (+0.9%) and materials (+0.9%) scoring the largest gains. Energy (+0.2%), which was down for a good part of the day, posted a modest gain but trailed the broader market.

Several economic reports will be released Thursday morning, including the final Q2 GDP report, initial jobless claims, the help-wanted index and new home sales. DJ30 +99.50 NASDAQ +15.58 SP500 +8.21 NASDAQ Dec/Adv/Vol 1204/1781/2.03 bln NYSE Dec/Adv/Vol 1158/2149/1.29 bln