MARKET SNAPSHOT: U.S. Stocks Mixed As Madoff Losses Hit Home
December 15 2008 - 9:56AM
Dow Jones News
By Kate Gibson
U.S. stocks sputtered in mixed trade at Monday's start, with
energy shares climbing along with the price of crude and the
financial sector weighed as firms detailed their exposure to the
alleged $50 billion fraud by Bernard Madoff.
The Dow Jones Industrial Average (DJI) gained 9.8 points to
8,639.48.
The S&P 500 (SPX) gained 1.04 points to 880.77, while the
Nasdaq Composite (RIXF) shed 3.83 points to 1,536.89.
The economic calendar for Monday included the December Empire
State Index, with the gauge of manufacturing activity in the New
York region contracting at a record pace in November.
In a separate report, the Federal Reserve said output of the
nation's factories, mines and utilities declined 0.6% in November
on broad-based weakness across manufacturing industries. .
Investors will also be looking ahead to Tuesday's Federal
Reserve interest-rate decision, where rates are expected to come
down half a point to 0.5%. .
"The FOMC meeting should be overshadowed this week by earnings
from Goldman Sachs (GS) on Tuesday and Morgan Stanley (MS) on
Thursday," said Marc Pado, U.S. strategist at Cantor
Fitzgerald.
Crude-oil futures rose before a meeting of the Organization of
Petroleum Exporting Countries later in the week, where production
is expected to be cut again. Light crude for January delivery
climbed $2.29 to $48.57 a barrel in early trade on the New York
Mercantile Exchange. .
The dollar fell sharply against other major currencies, with the
dollar index (DXY) down 0.8% to 82.44. .
"The uncertainty surrounding the fate of the U.S. auto industry,
coupled with the market's expectation of an imminent Fed rate cut
on Tuesday, pressured the dollar to start the week in a distresses
state," said Rebecca Lia, a currencies analyst with Wachovia
Corp.
The Wall Street Journal reported Monday that the Bush
administration is sizing up what terms to seek from the auto
industry in return for a bailout, including whether to push the
companies to file for bankruptcy.
The administration is discussing a rescue totaling $10 billion
to $40 billion or more, the Journal reported.
Shares in General Motors Corp. (GM) and Ford Motor Co. (F) both
rose in early trade.
As more details of the alleged fraud by former Nasdaq Chairman
Bernard Madoff emerged, Banco Santander (STD) said its customers
had an exposure of around $3.1 billion though its Optimal
asset-management business, while Japan's Nomura (NMR) has an
exposure of around $302 million.
Former Dow component Honeywell International Inc. (HON) shares
9.3% after the industrial company reaffirmed its full-year
guidance. .
Late Sunday Huntsman Corp. (HUN) ended its agreement to be
acquired by Hexion Specialty Chemicals Inc. and reached a
settlement over litigation. Huntsman said it is due payments
totaling $1 billion.
In international markets, Japan's Nikkei 225 rose 5.3% and the
French CAC 40 index added 0.3%.
Stocks on Friday erased early losses to close higher after the
Bush administration said it would step in to prevent a failure of
U.S. automakers amid fears that more job losses would deepen the
recession. The Dow Jones Industrial Average finished up 64.59
points, the S&P 500 climbed 6.14 points and the Nasdaq
Composite added 32.84 points.
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