Stocks Unfazed by Obama; Sprint Soars
Stocks pared their losses Monday as President Obama's speech on financial reform had little impact on the market.
The president said there is still a need for government help to stabilize the financial system but the need is waning. He also said that taxpayers have earned a 17-percent return on the taxpayer-funded bailout measures.
Also taking to the stage is Richmond Federal Reserve President Jeffrey Lacker at 12:30 pm and San Francisco Fed President Janet Yellen at 3:50 pm.
Stocks had started the day lower as a trade dispute between the US and China rattled the market and investors reflected on the one-year anniversary of the Lehman Brothers collapse.
President Obama on Friday announced tariffs against tires from China, which followed up Monday by asking the World Trade Organization to intervene. The tariffs came on the heels of a union complaint that a surge of imports of the Chinese tires were taking away American jobs.
China's commerce ministry said Sunday it launched an anti-dumping investigation into imports of U.S. chicken products and vehicles.
"You don't want to be messing with your biggest trading partner who holds most of your debt," Joe Saluzzi, co-manager of trading at Themis Trading, told Reuters. The economy "is still teetering on all sorts of edges here. Something like this could be the spark that sends us lower."
Drug stocks were higher from the getgo, after Eli Lilly announced plans to cut $1 billion in costs and 5,500 jobsover the next two years. The drug maker also backed its full-year non-GAAP forecast of $4.20 to $4.30 a share.
As the market started to turn around, techs, banks and retail also gained.
Shares of Sprint Nextel jumped following a report in Britain's Sunday Telegraph newspaper that Deutsche Telekomwas considering making a bidfor the phone carrier.
Sources told CNBC that Sprint is not awareof any Deutsche Telekom bid.
Fallout also continued from Kraft's failed bid for Cadbury. The British chocolatier released a letter saying the offer failed to reflect the company's true value, and also said Kraft's low-growth conglomerate business model didn't fit in with Cadbury's strategy.
And Johnson & Johnson is in talks to cut the price of its $1.5 billion merger with Irish drugmaker Elan for an 18.4-percent stake in the company and its drug pipeline.
Shares of Salix Pharmaceuticals surged more than 50 percent after the drug maker said its Rifaximin irritable bowl syndrome had met the main goals of late-stage studies.
Oil prices fell as the dollar, which has hit a succession of 12-month lows in recent days, firmed a bit. US light, sweet crude dropped below $69 a barrel.
Meanwhile, the anniversary of the collapse of Wall Street titan Lehman Brothers brought back memories of the financial crisis and raised fresh doubts over the recovery.
Market watchers around the world weighed in with their observations about the Lehman collapse and the following financial crisis, including legendary investor and CEO of Rogers Holdings, Jim Rogers.
When Lehman went bankrupt, "I thought thank goodness they're finally letting somebody collapse," Rogers told CNBC.
He said that “when somebody fails, you let them fail,” and that former US Treasury Secretary Hank Paulson “should have let ten people go bankrupt.”
MONDAY: Obama speech; Fed's Lacker, Yellen speak
TUESDAY: PPI; retail sales; Empire State survey; business inventories; earnings from Best Buy, Adobe
WEDNESDAY: Weekly mortgage applications; CPI; current account; industrial production; weekly crude inventories; earnings from Oracle
THURSDAY: Housing starts; weekly jobless claims; Philly Fed; Earnings from FedEx
FRIDAY: Quadruple witching
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