Stocks Rise as Traders Tap Brakes on Selloff (Market Update)

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Stocks Rise as Traders Tap Brakes on Selloff (Market Update)

Posted by baracc 487 days ago (http://www.smartmoney.com)

News at a Glance

Housing Woes: Case-Shiller Index missed consensus in Jan.
Small Rebound: Major indexes lean positive after losses.
Manufacturing Slows: Chicago PMI missed the mark in March.
Mile-High Wi-Fi: American Airlines expands Internet service.

The Lowdown
A day after Washington's smackdown of Detroit left equities in a deep hole, traders went bargain-hunting.
Stocks were higher Tuesday, recovering some of Monday's heavy losses. By 10:34 a.m., the Dow Jones Industrial Average had picked up 96 points at 7618. The Nasdaq had risen 25 to 1527, and the S&P 500 had picked up 9 at 797.
In economic news, the recent streak of largely positive data came to a close. The latest readings of the S&P Case-Shiller Index of home prices, the Chicago Purchasing Managers' Index and the Consumer Confidence Index each came in below economists' estimates. Economists cautioned against handicapping the end of a recession too soon.
Still, some traders swooped in on what they considered undervalued stocks in the wake of yesterday's auto-inspired selloff.
On Monday, the White House's rejection of turnaround plans from General Motors (GM) and Chrysler left the future of the American auto industry murky at best, triggering a mass exodus from the financial, energy, capital goods and materials sectors. The Dow dropped 254 points, or nearly 3.3%.
Attention shifted abroad with the emergence of a new plan to stimulate trade at the G-20 meeting. World Bank President Robert Zoellick unveiled a $50 billion global trade liquidity program to jumpstart the flow of goods and services between nations once more. The World Bank expects global trade to drop 6% in 2009, its largest single-year decline in 80 years, according to Reuters. The fund is designed to bolster trade credit, which had taken a hit with the broader credit market.
World markets were mixed. In Asia, Japan's Nikkei dropped 1.5%, while Hong Kong's Hang Seng picked up 0.9%. In Europe, the U.K.'s FTSE rose 3.6% in afternoon trading.
In energy, oil prices gave back their early gains. By 10:23 a.m., crude traded down 56 cents at $47.85 a barrel.

Corporate News

Google (GOOG) is launching its own venture capital fund, the firm said. Google Ventures take $100 million from the parent company and invest it in promising start-ups across a variety of industries, The Wall Street Journal reported, citing anonymous sources.

Sara Lee (SLE) is considering selling off its household and personal care business, Reuters reported. The business accounts for roughly $2.3 billion in revenue, about 17% of the firm's top line.

American Airlines (AMR) plans to extend its in-flight Internet access to roughly half its aircraft, about 300 planes, over the next two years, the Associated Press reported. The carrier, which has been testing the service on 15 of its planes, plans to charge as much as $12.95 to connect in middair to a flying WiFi hot spot.

The Economy

The S&P/Case-Shiller Composite 20-City Home Price Index fell in January to 19.0% below the year-ago period, compared to the revised 18.6% year-over-year decline in December. For January, economists had expected the index to have fallen 18.6%. REPORT

The Consumer Confidence Index rose to a March reading of 26.0, up from a revised February reading of 25.3, the Conference Board said. For March, economists had expected a bump to a reading of a 28.0. REPORT

The Chicago Purchasing Managers' Index for regional business activity fell to a March reading of 31.4, down from a February reading of 34.2, the Chicago branch of the National Association of Purchasing Management said. Economists had predicted the index would rise to a March reading of 34.4. A reading of less than 50 indicates contraction.

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