YAHOO[BRIEFING.COM]:
Word that the Obama administration is working on a plan to subsidize mortgage
payments for troubled homeowners spurred a late rebound in the major indices.
That helped the stock market turn a 3% loss into a modest gain.
Stocks traded with broad-based weakness for much of the session.
The downbeat tone was an extension of the stock market's inability to sustain
an advance since tumbling Tuesday in the wake of Treasury's disappointing bank
rescue plan.
The Dow actually fell to its lowest level since registering a bear
market low on Nov. 21, while the S&P 500 approached its January lows.
Declines were led by financial stocks, which remain central to the
concerns for the broader stock market. Financials were down more than 7% at
their session low, but finished the session with a 1.3% loss.
Stocks put together a rebound after Reuters reported the Obama
administration is working on a plan to subsidize mortgage payments for troubled
homeowners that pass certain tests. Fannie Mae and Freddie Mac would reportedly
play a supporting role. Market participants cheered the news
since stemming foreclosures is considered central to restoring the mortgage
market, which will help stop bank write-downs.
Meanwhile, investors remain largely unimpressed by the $789.5
billion economic stimulus bill, which is expected to come to a vote by this
weekend. Critics contend the bill is unlikely to lead a recovery in the
short-term.
Investors looked past the latest batch of quarterly announcements. Coca-Cola (KO 44.39, +3.12) led the way by
announcing better-than-expected results. Its rival, Pepsico (PEP 52.00, +1.39), announces tomorrow. Waste Management (WMI 29.26, +0.81) and
Market participants found little inspiration from a
better-than-expected January retail sales report. The report showed January
retail sales jumped 1%, which is the first increase since a 0.1% gain in July.
However, the report is being treated with skepticism amid ongoing
reminders of poor macro conditions. Jobless claims for the week ending Feb. 7
totaled 623,000, which is a bit more than expected, but down slightly from the
prior week. Initial claims are at their highest level in more than 25 years.
Meanwhile, 4.81 million continuing claims were filed. That is the
highest level recorded since records began in 1967.
Separately, businesses inventories dropped a larger-than-expected
1.3% in December. That is the largest drop since 2001. DJ30 -6.77 NASDAQ +11.21
NQ100 +1.3% R2K +0.6% SP400 +0.5% SP500 +1.45 NASDAQ Adv/Vol/Dec
1328/2.15 bln/1276 NYSE Adv/Vol/Dec 1414/1.48 bln/1609