Stocks Barely Budge as Investors Await New Details of Bailout
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Tuesday, February 10, 2009
Stock markets ended the day virtually flat as investors anxiously awaited new details of the White House's financial rescue plan.
The Dow Jones industrial average was down 9.72 points, or 0.12 percent, to 8270.87, while the Standard & Poor's 500-stock index inched up 1.29 points, or 0.15 percent, to 869.89. The tech-heavy Nasdaq composite index dipped 0.15 points, or 0.01 percent, to 1,591.56.
The White House is expected to outline how it plans to spend the second half of the $700 billion financial rescue plan aimed at shoring up banks, consumer credit markets and homeowners. The announcement was delayed in order to keep the spotlight on the massive stimulus package winding its way through the Senate.
"The big news is pushed off," said James Cox, managing partner at Harris Financial Group. "I really believe there's going to be a lot of fireworks" with the announcement, he said.
Bank stocks were mixed yesterday as investors held their breath for the announcement. Bank of America, which has already received $45 billion in federal funds, shot up 12.4 percent, or 76 cents, to close at $6.89. Citigroup finished up 1 percent, or 4 cents, at $3.95.
Wells Fargo, however, dipped 0.4 percent, or 8 cents, to $19.06. J.P. Morgan Chase fell 1.3 percent, or 35 cents, to $27.28. Still, Peter Cardillo, chief market economist with New York-based Avalon Partners, said he expects markets to rally today once the details of the plan are released.
"That should help restore confidence," Cardillo said. "There's just so much pessimism out there that everybody realizes that it will take another two quarters before we see some daylight."
President Obama spent the day lobbying for the stimulus package during a speech in Indiana and will hold a televised news conference this evening.
Overseas, markets were mixed. London's benchmark FTSE index barely budged, rising 0.06 points to 4291.93. The DAX index in Germany rose 0.5 percent, or 22.19 points, to 4666.82.
General Motors stock closed down 0.4 percent, or 1 cent, to $2.83 amid reports that it was likely to shut down several factories as it restructures under the terms of the government's loan. However, the Associated Press reported that the company is in talks with Delphi to save some of its plants that make crucial auto parts. Delphi has been operating under Chapter 11 bankruptcy protection, and General Motors is reportedly worried that it may run out of cash.
