Stocks Recover After Being Rattled by Hearing
Stocks clawed their way back after paring earlier gains amid worries about the confirmation hearing of the Treasury Secretary nominee.
The Dow Jones Industrial Average was up nearly 200 points, or more than 2 percent, after starting the day with a triple-digit gain, then taking it down to zero before revving it up again. The S&P 500and Nasdaq were also up more than 1 percent.
On Tuesday, the Dow ended below 8,000for the first time in two months and marked the index's worst decline on Inauguration Day in history.
President Obama's nominee for Treasury Secretary, Timothy Geithner, was grilled on Capitol Hilltoday over his failure to pay tens of thousands of dollars in taxes when he was working as an International Monetary Fund official. However, he was expected to be confirmed.
"If Geithner does not get approved, then the market will have a big sell off and bonds will rally," Tom Sowanick, chief investment officer at Clearbrook Financial, told Reuters.
Bank stocks rebounded after getting crushed on Tuesday.
Citigroup and Bank of America were the among the top gainers on the Dow, up more than 20 percent, following news that Bank of America CEO Ken Lewis bought $1.2 million shares of his company's stock.
JPMorgan was up 20 percent, rounded out the Dow's top three.
US Bancorp abstained from the bank rally after reporting its profit fell 65 percentto its lowest level since 2001.
Better-than-expected news came on the earnings front from IBM, which beat Wall Street estimates due to tight cost controls and a lower tax rate. IBM also forecast a higher-than-expected 3-percent rise in 2009 earnings per share.
Swedish telecom-equipment giant Ericsson posted a stronger-than-expected fourth-quarter profit but announced 5,000 job cutsas it seeks deeper cost cuts.
More tech earnings are on the way, including Apple after the bell today, and both Microsoft and Google on Thursday.
Meanwhile, General Motorsexpects the money from a government aid packageto arrive in the next few days as the giant car maker faces a cash shortage.
Fritz Henderson, GM's president and chief operating officer, said that without the second installment of $5.4 billion, the company would run out of cash long before the end of March.
General Electric shares fell to a new low, passing their November closing low of $12.84, after Goldman Sachs cut its price target and earnings forecast for GE, the parent company of CNBC.
If GE holds at or near this level, it would be its lowest close since March 1996. GE is the fifth worst Dow component this year, down 24 percent.
Also, United Tech said fourth-quarter profit rose 8 percent, translating to $1.23 a share and beating analysts' estimates by a penny.
And Wal-Mart saw its shares slip 1 percent after Credit Suisse cuts its outlook for the world's leading retailer from "outperform" to "neutral."
Fund manager BlackRock said fourth-quarter net income fell 84 percent and its earnings were 68 cents a share, badly missing estimates of $1.26.
Intuit shares fell to their lowest level of the day after Geithner said in his congressional testimony that he used the company's Turbo Tax softwareto do his taxes.
WEDNESDAY: Geithner hearing; Earnings from Apple, Burlington Northern after the bell
THURSDAY: Housing starts; jobless claims; crude inventories; Earnings from Nokia, Fifth Third Bancorp; KeyCorp; Southwest Air; SunTrust Banks; United Health, Union Pacific, Google, Microsoft, AMD, Capital One
FRIDAY: Natural-gas inventories; Earnings from GE, Harley-Davidson and Xerox
ALL WEEK: Detroit Auto Show (Jan. 11-25)
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