Stocks Pare Gains as Confidence Plunges
U.S. stocks pared gains Tuesday as a reading on consumer confidence plunged to its lowest level earlier.
Still, stocks remained up sharply as the U.S. joined the global rally following Monday's late selloff.
The Dow Jones Industrial Average shot up more than 200 points, or 3 percent, in the first minute of trading, clawing back all of the prior session's 203-point loss, then just kept going to 300. After the confidence report, the index shaved about 80 points off that gain. The S&P 500 and Nasdaq also posted sharp gains, with the Nasdaq logging the best gain of the three.
The rebound was attributed to bargain hunting and expectations that the Federal Reserve will announce a rate cut tomorrow. Normally the market would tend to tread water the session before a Federal Open Market Committee decision, but volatility shows no signs of abating.
Casting a pall over the upbeat start, the Conference Board reported its gauge of consumer confidence plunged to a record low of 38 in October from an upwardly revised 61.4 in September. The October reading fell short of the consensus estimate of 52 and even the most pessimistic forecast in the survey, which was 45.
Asian markets posted solid gain with Japan leading the way, The Nikkei finished more than 6 percent higher. Dow futures indicated a gain of more than 340 points, though fair market had the index 152 points higher.
European markets also gained, but Germany's DAX was the standout, soaring 10 percent driven by component Volkswagen, which received a boost when Porsche took a larger stake in the company, triggering a huge short squeeze. VW shares, which have more than quadrupled since Friday's close, added another 80 percent in the current session.
Dow component General Motors , which led the blue-chip index lower Monday, was one of the index's biggest gainers Tuesday as the auto maker, along with Cerberus Capital Management, is asking the government for $10 billion to facilitate a GM/Chrysler merger, according to Reuters.
Rival Ford also posted a strong gain.
Boeing was the biggest advancer on the Dow after the aerospace giant reached a tentative labor agreement with its biggest union.
American depositary shares of BP soared after the British oil company said its profit more than doubled, helpedbysoaring oil prices.
U.S. oil giant ExxonMobil also jumped afterfalling more than 4 percent Monday.
In morning trading, crude jumped nearly $2, trading between $64 and $65 a barrel.
And business software maker SAP scrapped its 2008 revenue outlookdue the uncertainty in the global economy.
TUESDAY: Fed begins two-day meeting; consumer confidence; Earnings from U.S. Steel
WEDNESDAY: Weekly mortgage applications; durable goods; weekly crude inventories; Fed announcement on interest rates; Earnings from Aetna, Corning, Kellogg, Kraft, P&G, Qwest, Sony and Visa
THURSDAY: Weekly jobless claims; First look at Q3 GDP; weekly natural-gas inventories; Eanrings from AstraZeneca, Colgate Palmolive, CVS/Caremark, ExxonMobil, Motorola, Royal Dutch Shell and Electronic Arts
FRIDAY: Personal income and spending; consumer sentiment; Fed's Yellen speaks; Earnings from Chevron, Clorox and Nissan
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