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Markets On Rebound For 2009?

Friday, 2 Jan 2009 | 1:25 PM ET

This post is from CNBC producer Robert Hum.

Markets around the world are starting off 2009 in a celebratory mood after a dismal 2008. Energy and material stocks lead U.S. markets higher in early morning trading. This despite weaker energy and commodity prices amid the dollar’s gains today. Retailers are rallying for the third day in a row, ahead of likely more gloomy retail sales numbers next week.

European shares are up 2% despite some bleak economic reports out of the U.K. today. A survey performed by the country’s largest mortgage lender showed home prices plunged 16% in the fourth quarter from a year ago. That was the sharpest decline in at least 25 years.

Additionally, the Bank of England reported that new home mortgage approvals fell to 27,000 in November, its lowest level since at least 1999. With signs that the country’s recession is worsening, expectations grow higher that the Bank of England will announce another large interest rate cut of 75 basis points or more next week.

Elsewhere:

Sam Zell’s Equity Group Investments raised its stake in Starwood Hotels to 8.1% from 7.7%. According to a SEC filing, it also signed a confidentiality agreement to facilitate information sharing between the hotel chain and the investment group in exchange for “limitations on its ability to effect a change in control of the company.”

GMAC will issue 5 million preferred shares, which pay an 8% interest rate, to the federal government in exchange for the $5 billion capital infusion it received. GM shares lead the Dow today with its 10% gain.

The Semiconductor Industry Association (SIA) reported that global semiconductor sales dropped nearly 10% year-over-year in November. Sales in the Americas plunged 20% and European sales fell 14% during that period.

Done deals: Bank of America completed its merger with Merrill Lynch. The acquisition moves BofA ahead of JPMorgan Chase and Citigroup to become the biggest bank in the U.S. with $2.7 billion in assets. Additionally, Wells Fargo closed its deal to acquire Wachovia, and PNC Financial completed its purchase of National City.

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BAC
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GJM
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GM
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HOT
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JPM MLP ETN
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WFC
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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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