Stocks at Wall Street manage a turnaround

A late hour rally helps indices erase all their losses

Stocks at Wall Street showed signs of improvement on Thursday, 15 January, 2008. Disappointing economic data, falling crude price and the overall financial sector weighed on Wall Street earlier today. Nevertheless, indices pared all their losses and managed to eke out some gains after a long time. News of Bank of America might requiring bailout money to finance the Merrill Lynch acquisition unnerved investors once again today.

After opening 68 points lower earlier in the day, The Dow Jones Industrial Average was down by more than 200 points at one point of time. It dropped below the 8,000 mark for first time since November, 2008. At the end, it ended higher by 12.3 points at 8,212, the Nasdaq closed higher by 22.2 points at 1,511 and the S&P 500 closed higher by 1.1 points at 843.74.

Eight of the ten sectors ended higher today. Telecom and financials were the only laggards.

Inspite of a better than expected earning report from JP Morgan Chase, the financial sector has come to little help for the market.

But the news that had been really bothering market today was the reports that Bank of America is close to receiving aid from the U.S. government to help in its acquisition of Merrill Lynch. Bank of America has already received more than $25 billion in aid.

Among major economic reports for the day, the Federal Reserve Bank of Philadelphia's reported on Thursday, 15 January, 2009 that manufacturing conditions in the Philadelphia region continued to be "depressed" in early January, 2009. The Philly Fed index improved to negative 24.3 from a downwardly revised negative 36.1 in December. While still sharply negative, the index was better than the negative 36.0 expected.

The Labor Department reported on Thursday, 15 January, 2009 that first-time applications for state unemployment benefits rose 54,000 to a seasonally adjusted 524,000 in the week ending 10 January,2009. However, the four-week average of new claims fell 8,000 to 518,500, a level that is 55% higher than the average during the same period in the prior year.

The report also detailed that the number of people collecting benefits in the week ending 3 January, 2009 fell 115,000 to 4.5 million, a level that is 64% higher than the prior year. The four-week average of continuing claims rose 27,500 to 4.5 million, the highest level since December 1982. The insured unemployment rate remained at 3.4%.

In another separate report, the December Producer Price Index fell 1.9% month-over-month, which wasn't quite as bad as the 2.0% downturn that was expected. The prior reading shows a 2.2% decline. Excluding food and energy, producer prices were up 0.2% month-over-month.

In the technology sector, RIMM and Qualcomm helped the sector gain ground which otherwise witnessed good losses from Apple and Motorola. Apple fell after CEO Steve Jobs announced that he is taking medical leave till June, 2009.

On the other hand, Motorola issued a cautious outlook and announced additional job cuts. The company will cut roughly 4,000 employees this year. That's in addition to the 3,000 cuts already announced.

Tomorrow, Citigroup is expected to garner the most attention as the company is expected to report its fifth consecutive quarterly loss. Economic data for the day includes December CPI and industrial production scheduled before market opens. University of Michigan will release its consumer sentiment survey