Stocks Rebound but Fear Remains; Citi Gains
Stocks bounced back Friday after a two-day selloff that saw major indexes crash through support levels and shaved 872 points off the Dow.
But, market pros were, with good reason, skeptical.
"At best we might see a day or two of further rebounds, but as we've seen in the past after a big rally it always comes off, it's always met with skepticism," Omer Bhatti, head sales trader at Worldspreads, told CNBC.
"People are being spooked out of positions instead of thinking rationally," he added.
All of the major indexes suffered massive selling in the previous session and closed at multi-year lows across the board. A lack of direction on the proposed auto bailout and TARP plan continued to add to investors' fear.
Yet the massive drop Thursday which saw bond prices post their biggest gains ever, triggered another round of speculation as to whether the market had found a bottom.
Such a bottom would be expected to trigger a violent rally.
"Add a gigantic short-covering rally and it could be a rally the likes that we've never seen before," Matt Zeman of LaSallle Futures told CNBC.
Citigroup shares jumped 10 percent, trading above $5 a share, after falling nearly 50 percent in the prior two sessions.CEO Vikram Pandit, aiming to swat down rumors that the company may be sold off in pieces, said the firm would not sell its Smith Barney brokerage unit.
Most financials were higher Friday but JPMorgan shares fell more than 5 percent.
General Motors and Ford also advanced, even as the Big Three CEOs were sent back to Detroit on their private jets without a bailout as Congress agreed to revisit the issue in December.
Shares of Dell Computer rose after the computer maker reported its earnings fell but beat expectations as cost-cutting measures and a rise in consumer sales helped offset weakness in corporate sales.
Meanwhile, Heinz reported its profit rose 22 percent, helped by price increases, currency hedging and strong sales in North America and emerging markets. The maker of Heinz ketchup, Ore-Ida potatoes and Smart Ones frozen foods also backed its full-year forecast.
In the latest sign of how tough it is for retailers, AnnTaylorposted a lossas same-store sales tumbled 20 percent. The women's apparel chain also declined to offer an outlook for the crucial holiday-season quarter but said that margins would be under pressure in this highly promotional season.
Wal-Mart , which has been one of the biggest beneficiaries of the spending slowdown as shoppers flock to its everyday low prices, announced Friday that Mike Duke will succeed Lee Scott as CEO.
>> To track how the holiday season is going, check out CNBC's Holiday Central blog.
People at risk of foreclosure will get a reprieve during the festive season as mortgage finance companies Fannie Mae and Freddie Mac have suspended foreclosure sales between Nov. 26 and Jan. 9.
In political news, President-elect Barack Obama is likely to nominate Hillary Rodham Clinton as secretary of state after Thanksgiving, CNBC's John Harwood confirmed Thursday.
Numerous Federal Reserve representatives will take to the stage with Philadelphia Fed President Charles Plosser speaking at midday in Philadelphia and Chicago Fed President Charles Evans at 12:40 pm in Indianapolis.