Modest gains at Wall Street

Senate and House reach an agreement over stimulus plan boosting stocks

Stocks at Wall Street managed a modest and decent end on Wednesday, 11 February, 2009 after yesterday's huge sell-off rattled investors yesterday. Reports indicating that a tentative agreement has been reached regarding the stimulus plan gave investors some relief today and the indices ended the day with modest gains.

Market started the day in the green and except for Nasdaq which slipped in the red for a very brief period, the indices managed to end in the green. Chairmen of various banks which have already received the first installment if TARP funding and is also on the way to receive the next slot testified today in front of the Congress. The economic and earning reports that checked in today remained mixed in nature.

After opening 74 points higher earlier in the day, The Dow Jones Industrial Average ended higher by 50 points at 7,939, the Nasdaq closed higher by 6 points at 1,30 and the S&P 500 closed higher by 6.5 points at 833.

As per latest reports in the market, the stimulus plan now totals $789.5 billion, and is on track for vote later this week. The impression that the Senate and House have agreed on the terms of a $789.5 billion economic stimulus bill spurred stocks higher.

The financial sector tried to support the market today. Citigroup and Bank of America were trying to hold the forte and are the most actively trading stocks.

Among major economic news today, the December Trade Balance showed a deficit of $39.9 billion. That is actually up from the prior reading, reflecting a drop in imports, which was partly offset by a drop in exports.

In the earnings side, Research In Motion stated this morning it expects fourth quarter earnings to be at the low end of its previous forecasts.

On Wednesday, crude-oil futures for light sweet crude for March delivery closed at $35.94/barrel (lower by $1.61 or 4.3%) on the New York Mercantile Exchange. Earlier during the day, it went up by 1%. Prices gave up gains as Energy Department reported larger than expected build up in crude inventories for the last week. The strong dollar also impacted crude prices today.

EIA reported today that crude inventories excluding those in the Strategic Petroleum Reserve gained 4.7 million barrels to 350.8 million barrels in the week ended 6 February, 2009. Inventories at Cushing, Oklahoma, the delivery point for futures traded on the New York Mercantile Exchange, rose to 34.9 million, the highest level on record.

Other than a few earning reports, the economic calendar is light tomorrow. January retail sales data and weekly jobless claims are both due early tomorrow morning followed by the business inventory data for December.