Wall Street continues to deal with more layoffs

Fifty thousand job cuts announced in a single day by US and global companies

Stocks at Wall Street managed a steady end with some modest gains on Monday, 26 January, 2009, paring most of their earlier gains. Job cut news was the hot topic in Wall Street today with more than 50,000 layoffs announced in one single day, today. Reports of an increase in sales prices of homes in December, 2008 tried to inject some enthusiasm in the US stocks today. The report of Pfizer acquiring Wyeth for a whopping $68 billion deal also acted as a positive catalyst.

After being up by more than 140 points earlier during the day, The Dow Jones Industrial Average ended higher by 38 points at 8,116, the Nasdaq closed higher by 12 points at 1,489 and the S&P 500 closed higher by 4.6 points at 836. Dow had slipped in the red for a very brief period of time.

Nine out of thirty Dow stocks ended in the red today led by Caterpillar and GM.

It was a job cut bloodbath on this Monday today. Among major accompanies announcing job cuts today were Caterpillar, Sprint, GM and Home Depot. The companies announced layoffs to the tune of 20,000, 8,000, 2000 and 7,000 respectively.

Job losses came from overseas as well, with Philips Electronics, Europe's biggest consumer electronics firm, saying it would lay off 6,000 workers. It also reported its first quarterly loss in five years. Steel giant Corus Group said it would cut 3,500 jobs around the globe, with most, or about 2,500, coming in Britain.

Among acquisition news, Pfizer announced that it is acquiring Wyeth for $68 billion, or $50.19 per share. The offer comes as a 29% premium to Wyeth's last closing. On the other hand, Dow Chemical announced this morning that it does not intend to close the pending acquisition with Rohm and Haas on or before tomorrow.

In the earning arena today, Caterpillar reported earnings results that missed the consensus estimate. It also issued downside guidance and plans to cut roughly 20,000 jobs. On the other hand, another Dow component, McDonald's reported earnings per share results that surpasses consensus forecast and later indicated that global comparable sales continue to be strong in January. Same-store sales increased more than 7% in the fourth quarter.

Among major economic reports for the day, existing home sales in December increased 6.5% to an annualized rate of 4.74 million units. The December number was better than the consensus estimate, which was set at 4.40 million. But median home prices declined 9.3%, which is the biggest drop since the 1930s. The month's supply of unsold homes at the current sales rate fell to 9.3 in December from 11.2 in November.

On Monday, crude-oil futures for light sweet crude for March delivery closed at $45.73/barrel (lower by $0.74 or 1.6%) on the New York Mercantile Exchange. Last week, crude prices ended higher by 9%. Prices had reached a high of $49 earlier during the day today.

Other than few earning reports, The Federal Open Market Committee begins its two-day meeting tomorrow. It will announce its latest monetary policy decision on Wednesday.