U.S. stocks edged up on Tuesday after a surprising rise in December pending home sales and strong earnings from drugmaker Merck tempered worries about the economy and an otherwise gloomy quarterly results season.

But Nasdaq’s gains were limited as a poor revenue outlook from flash memory card maker SanDisk Corp , whose chips are used in products including cell phones and digital cameras, signaled slower consumer spending in the technology sector.

Still, investors saw a glimmer of hope in the housing market after pending sales of existing homes rose 6.3 percent, lifting an index of home builder stocks  nearly 6 percent.

Wall Street was also helped by news that the Federal Reserve extended, by six months, programs designed to funnel billions of U.S. dollars to markets worldwide to keep money flowing in the battered banking system.

“We have a lot of investors desperately looking for signs that fundamental improvement is on the horizon,” said Craig Peckham, equity trading strategist for Jefferies & Co in New York. “The Fed is extending liquidity programs and telling you in same breath that conditions remain quite strained.”

The Dow Jones industrial average added 43.32 points, or 0.55 percent, at 7,980.15. The Standard & Poor’s 500 Index  gained 3.91 points, or 0.47 percent, at 829.35. The Nasdaq Composite Index  rose 3.05 points, or 0.20 percent, at 1,497.48.

Cost cuts and favorable taxes helped Merck & Co and Schering-Plough Corp post quarterly results above Wall Street estimates. Merck was among the Dow’s biggest boosts, up 5.5 percent to $29.99, while Schering-Plough rose 5.3 percent to $18.40.

Pending sales of existing U.S. home rebounded in December, according to data based on contracts signed, a promising indication after months of negative data.

No. 1 U.S. home builder D.R. Horton was the top percentage gainer on the New York Stock Exchange, surging more than 18 percent to $7.23. It reported a smaller-than-expected quarterly loss on Tuesday.

Luxury home builder Toll Brothers gained 4.2 percent to $17.70, while No. 3 U.S. home builder, Pulte Homes , rose about 3.5 percent to $10.60, ahead of its expected results on Wednesday.

But the Nasdaq was hurt after SanDisk warned that revenue for the current quarter would fall short of expectations and said it may undertake an equity offering that could dilute shares by as much as 20 percent. The stock plunged nearly 23 percent to $8.71.

Losses still plagued banks amid a lack of definitive measures to steady the sector. The KBW index of banking shares fell nearly 6 percent as investors worried that the government may have to nationalize the sector, or parts of it.

Bank of America tumbled 9.5 percent to $5.44, while Citigroup shed nearly 5 percent to $3.47, after hitting a session low.

Stability in the housing market and financial sector is critical to the recovery of the U.S. economy, which slipped into recession in December 2007. Investors are bracing for the U.S. payrolls report for January that is due for release on Friday morning, which could pin unemployment at 7.5 percent, the highest rate since September 1992.

“It’s going to be tough to get anything really going before we get to that jobs report on Friday,” said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co in San Francisco. “It’s looming like a dark cloud.”

NEW YORK, Feb 3 (Reuters)

U.S. stocks tumbled on Wednesday as investors feared more credit losses in the banking sector, while bleak December retail sales compounded worries about the toll on consumers from the deepening recession.

Citigroup , down more than 15 percent to $4.98, was a standout drag on the financial sector, while shares of JPMorgan and Bank of America fell 5 percent and 3.5 percent respectively.

The fall in Citigroup, a Dow component, followed a deal by the embattled bank to sell a controlling stake in its crown jewel unit, the Smith Barney retail brokerage, to Morgan Stanley for $2.7 billion.

Analysts reckon the Smith Barney sale was a precursor to a break-up of Citigroup and that the bank must be urgently seeking to replenish capital due to mounting losses.

“You’d think the news on banks is baked in, but there’s still a lot of headwinds,” said Rich Parker, head of trading, Stanford Group, in New York.

“The write-downs are starting to really scare people outside of the banking area as well. Is there a balance sheet out there that you can really trust? By all indications, it seems the recession is going to be a historically long one.”

The Dow Jones industrial average slid 277.01 points, or 3.28 percent, to 8,171.55. The Standard & Poor’s 500 Index tumbled 29.99 points, or 3.44 percent, to 841.80. The Nasdaq Composite Index dropped 48.07 points, or 3.11 percent, to 1,498.39.

The sell-off marked another hindrance to the market’s push to recover from its November bear market low. The benchmark S&P 500 began 2009 up more than 20 percent from that low but is now up about 11.5 percent. The S&P financial index fell nearly 6 percent.

Sales at U.S. retailers fell 2.7 percent in December, government data showed on Wednesday, as a deteriorating economic climate forced consumers to cut back on spending during the key holiday period.

Consumer spending accounts for about two-thirds of U.S. economic activity and as such is a key pillar of corporate profits. The S&P retail index declined 3.7 percent.

Investors also sold off shares of economic bellwethers including big manufacturer Caterpillar Inc , down 6 percent. On Nasdaq, shares of iPhone maker Apple Inc led the slide, falling 2.4 percent to $85.64.

Even more unnerving to investors was a forecast by Morgan Stanley analysts that HSBC , Europe’s biggest bank, is likely to halve its dividend and may need to raise up to $30 billion of capital.

Additionally, Germany’s Deutsche Bank posted a loss of about $6.4 billion for the last three months of 2008, hitting markets in Europe.

JPMorgan is due to post quarterly results on Thursday after it moved up its reporting date, followed by Citigroup on Friday after it also moved up its results date.

Thomson Reuters data show expectations for JPMorgan have crumbled: A month ago it was expected to earn 27 cents per share in the fourth quarter. Two days ago that view was down to 5 cents. Before the bell, the view was a penny before special items.

On Tuesday, Federal Reserve Chairman Ben Bernanke said more steps were needed to stabilize banks, reviving the idea of authorities sopping up toxic assets from banks’ books.

NEW YORK, Jan 14 (Reuters)

U.S. stocks tumbled on Monday as signs of further deterioration in the economy around the world punctured last week’s market enthusiasm, with financial services companies and retailers among Wall Street’s biggest drags.

Major industrial companies also contributed to losses on signs global demand is faltering, leading investors to pare back risk in favor of safe-haven government debt.

With the holiday shopping season under way, investors feared that retailers may turn in their bleakest sales in many years. The S&P retail index declined 4.4 percent.

Department store Macy’s Inc tumbled 9.6 percent.

Consumers made repeat trips to stores and spent more on bargains this weekend, but analysts said the rush is unlikely to translate into a much-needed boost in profit.

“Things are looking quite bleak. Everyone acknowledges that,” said Brian Gendreau, investment strategist at ING Investment Management in New York. “The question is to what extent is that already priced into the markets. Apparently, not entirely.”

The Dow Jones industrial average slid 383.26 points, or 4.34 percent, to 8,445.78. The Standard & Poor’s 500 Index shed 45.94 points, or 5.13 percent, to 850.30. The Nasdaq Composite Index plunged 82.09 points, or 5.35 percent, to 1,453.48.

In the United States, factory activity fell in November to its weakest since 1982, according to the Institute for Supply Management. The data jolted investors who earlier got news of weaker Chinese and European manufacturing activity.

Top drags included financials, with Citigroup down nearly 9 percent, after an influential analyst forecast more losses for the major U.S. bank. A slide in commodity prices pinned resource stocks in the red, with aluminum producer Alcoa tumbling almost 9 percent.

Among big manufacturers, Caterpillar Inc plunged 8.6 percent, as General Electric slid more than 7 percent.

The market’s slide extended a global equity rout that hurt stocks in Asia and sent European indexes sliding 4 percent or more.

A lower close on Monday would snap a 5-day streak of gains for the S&P 500 stock index. Yields on benchmark 10-year Treasury notes sagged to five-decade lows and prices rose as investors sought the safety of government debt.

Citigroup shares fell to $7.49 on the New York Stock Exchange, while Bank of America slid 8.7 percent to $14.82. The S&P financial index plunged 7.1 percent.

Shares of Caterpillar, a maker of bulldozers and excavators, dropped to $37.33.

Among retailers, shares of department store operator Macy’s Inc tumbled 9.6 percent to $6.71, as those of Wal-Mart Stores , the world’s biggest retailer, shed 3.3 percent to $54.04.

One analyst expected the U.S. credit-card industry to cut $2 trillion in credit lines over 18 months, which would be a severe blow to spending for cash-strapped consumers.

Shares of Alcoa fell to $9.78. Shares of energy companies were another drag as oil prices fell on concerns that the economic slump will hurt energy demand. U.S. front-month crude fell about 8 percent to $49 a barrel.

On Nasdaq, chipmaker Qualcomm Inc was the top drag, falling 6.3 percent to $31.44.

Ellis Mnyandu
NEW YORK, Dec 1 (Reuters)

U.S. stocks were mostly higher in thin trade on Friday, as investors eyed retail sales on the first day of the shopping season after the Thanksgiving Day holiday, to gauge the extent of weakening consumer demand.

European and Asian shares were also higher, despite the attacks in Mumbai, India, while U.S. Treasury debt prices and the U.S. dollar both gained as investors continued to look for safe-havens as global economic growth slows.

“It’s a light volume day so you’re going to see some choppy trading, with so many people out,” said Robert Finkel, consumer trader at Stifel Nicolaus in Baltimore of the U.S. stock market.

“I’m watching how things go from a retail standpoint today – we’ve heard a lot of speculation about how bad it’s going to be, now we’ll get some proper feedback.”

The U.S. holiday weekend will test the strength of consumer sentiment, a main driver of the U.S. economy, as the country faces its worst financial crisis since the Great Depression. If the U.S. consumer fails to buy, companies across the globe can expect to see fewer exports and profits.

The Dow Jones industrial average rose 32.42 points, or 0.4 percent, to 8,759.03. The Standard & Poor’s 500 Index rose 0.66 points, or 0.1 percent, at 888.34. The Nasdaq Composite Index shed 11.99 points, or 0.8 percent, to 1,520.11.

The S&P’s retail index dipped 2.3 percent.

The U.S. stock market was closed Thursday for the Thanksgiving holiday and is trading for half the day on Friday. On Wednesday, stocks ended higher, capping the Dow’s biggest four-day percentage gain since 1932.

Technology shares slid after signs of a downturn in global chip demand as STMicroelectronics cut its fourth-quarter outlook. Industry sources said Taiwan companies want to slash costs. The semiconductor index shed 1.1 percent.

OPEC MEETS

U.S. light crude for January delivery stood at $51.52 a barrel, down $2.90, on course to end the month down more than 20 percent, as OPEC ministers prepared to meet in Cairo to discuss potential further supply cuts to combat a global fall in demand .

In the U.S. Chevron fell 1.9 percent tracking oil lower.

Indian stocks ended higher despite the attacks in Mumbai, but India’s 10-year bond yield fell to its lowest level in three years on expectations that the attacks will an impetus to central bank interest rate cuts.

Globally, the MSCI all-country world index was 0.1 percent firmer, although it has gained more than 10 percent this week, the first weekly gain in four weeks.

“On a range of measures, there is undoubted value to be found in many of the world’s equity markets,” said Sarah Arkle, chief investment officer with Threadneedle Asset Management.

The pan-European FTSEurofirst 300 was up 0.7 percent, as buoyant pharmaceutical shares eclipsed a drop in cyclical mining and industrial sectors.

Earlier, Japan’s Nikkei average climbed 1.7 percent to close out its best week in a month.

The U.S. dollar regained traction against major currencies after early losses. The euro lost 1.8 percent to $1.2656 . The dollar was flat at 95.36 yen .

Benchmark 10-year Treasury notes traded higher in price for a yield of 2.9673 percent. The benchmark yield, which moves inversely to prices, fell to as low as 2.82 percent on Friday, according to Reuters data, marking the lowest in at least five decades.

Overall, benchmark yields are on track for the biggest monthly fall in at least 12 years, according to Reuters data, as investors have stampeded into lower-risk investments on signs of ever-deepening economic distress. The 10-year yield has shed more than a full percentage point since the end of October.

Euro zone government bonds rose, reflecting concern about the economy and expectations of interest rate cuts. Two-year Schatz yields were last down 3 basis points to 2.202 percent.

By Nick Olivari
NEW YORK, Nov 28 (Reuters)

At the New York close, all three major U.S. indices had sizeable gains:

* The blue-chip Dow Jones Industrial Average Index soared 889.35 points, an increase of over 10%, to close at 9,065.12.
* The tech-laden Nasdaq Composite Index jumped 143.57 points, an increase of 9.5%, to reach 1,649.47.
* And the broader Standard & Poor’s 500 Index shot up 91.59 points, an increase of over 10%, to settle at 940.51.

“The valuations are extremely compelling right now,” Dan Veru, who helps manage about $2 billion at Palisade Capital Management in Fort Lee, New Jersey, told Bloomberg News. “When you’re in extreme oversold conditions, the market is prone to these types of wild swings. The key thing is, can we hold these gains?”

It was the second-biggest daily point gain for the blue-chip Dow, which had a record-setting 936-point one-day gain earlier this month.
With a “lack of selling pressure” late in the afternoon, “the buyers began to ride in on their horses, and that brought in some additional buyers and short-covering,” Robert Pavlik, chief investment officer at Oaktree Asset Management, told MarketWatch.

All sectors posted gains across the board with energy, up 11.76%, and basic materials, up 11.74%, marking the largest gains.

The Fed’s Federal Open Market Committee (FOMC) is expected to release its statement on monetary policy tomorrow (Wednesday) afternoon.

The Fed is widely expected to reduce its benchmark Federal Funds target rate as the likelihood of a U.S. recession continues to increase and inflation pressures have abated.

The Fed Funds rate currently stands at 1.50% and a cut of 25-50 basis points is expected.

“The cut is already in the market,” John Ryding, economist at RDQ Economics told AFP.

“The question is whether it’s 25 or 50 basis points.”

Source: Dow Zooms Above 9,000 on Eve of Expected Fed Rate Cut

“The growing reality is that this is not just a slowdown, but a true recession,” Joel Naroff, president and chief economist of Naroff Economic Advisors told Money Morning Friday. “Europe and Asia can no longer deny U.S. problems are also hitting there.”

Friday was the 79th anniversary of 1929’s “Black Thursday,” when U.S. stocks were decimated at the start of the Great Depression. And while U.S. markets weren’t quite as hard hit on that date in 2008 as they were in 1929, the overall global effect was chilling.

This October is on track to be the worst since the crash of 1987.

The MSCI World Index has been decimated as each of the 48 developed nations tracked by MSCI Inc. (MXB) have marked a decline so far this year, with 22 of those nations down more than 50%, Bloomberg News reported.

Emerging markets, the global superstars of growth in 2007, are also slowing. Of the “BRIC” nations of Brazil, Russia, India and China, Russia has been hit the hardest. Russia’s Micex Index is down more than 73% year-to-date. China’s stock market is down more than 60% from its peak.

All three major U.S. indices have racked up steep losses for the month of October and are deep in bear market territory for the year.

• The blue-chip Dow Jones Industrial Average Index is down 22.8% for the month and 36.8% year-to-date.
• The tech-laden Nasdaq Composite Index is down 25.8% for the month and 41.5% for the year.
• And the broader Standard & Poor’s 500 Index has dropped 24.7% in October and is down 40.3% so far this year.

The month has seen unprecedented government intervention into the private markets, including coordinated interest rate cuts and widespread bank recapitalization measures, but global stock indices continue to fall. The U.S. Federal Reserve is slated to begin a two-day meeting tomorrow (Tuesday).

“The outlook for the market really depends upon what type of action the Fed may take,” Doug Roberts, chief investment strategist for Channel Capital Research in Shrewsbury, New Jersey, told Reuters. “I wouldn’t rule out the possibility of something on a coordinated basis globally as well.”

Widening Swath of Recessions

Friday’s steep sell-off was sparked in part by the British Office for National Statistics’ announcement that, after a flat second quarter, U.K. gross domestic product (GDP) contracted 0.5% in the three months ended Sept. 30. It was a sharper decline than expected, as median economists’ estimates projected a 0.2% decline, according to Reuters.

Howard Archer, economist at Global Insight Inc., said the reading indicates that the United Kingdom is in a recession.

“The depth of the decline means that we are there to all intents and purposes. Indeed, there can be no doubt that further marked GDP contraction will occur in the fourth quarter as consumers retrench in the face of major headwinds and investment is pared back sharply,” Archer told The Financial Times.

Other European nations have already succumbed to recession, while still more are teetering on the brink of economic contraction. Germany, the EU’s largest economy, is expected to see a 0.2% contraction in gross domestic product (GDP) for the third quarter after a 0.5% contraction in the second quarter. And the nation of Iceland is dangerously close to bankruptcy.

In Asia, Japan – the world’s second largest economy – is also dangerously close to recession. Japan’s GDP contracted 2.4% in the three months ended June 30 after expanding 3.2% in the first quarter.

Worse, the United States could be next.

U.S. Economic Peril

U.S. GDP for the second quarter clocked in at a surprisingly strong 2.8%. But the advance estimate for third quarter U.S. GDP is slated for release this coming Thursday, and according to Naroff, the world markets could very well be in for another shock.

“U.S. GDP contracted significantly in the third quarter,” Naroff said. He predicts GDP may have fallen as much as 2.5% – 3.0%. “Such a sharp slowdown is not expected.”

Global investors might not expect such a sharp decline, but a dire stream of economic indicators has been flooding in for months and they haven’t painted a pretty picture.

“We expect our number next week not to be a good one, and the next quarter could probably be tough as well,” White House Press Secretary Dana Perino said at a White House briefing on Thursday, referring to the upcoming GDP announcement, Bloomberg News reported.

“The president knows that we’re in for a rough ride,” Perino said.

According to Bloomberg data, median economist expectations predict a 0.5% contraction in U.S. GDP for the third quarter.

U.S. unemployment continues to rise and a slowdown in consumer spending, which is responsible for two-thirds of GDP, is bound to slowdown.

“I don’t see how the consumer can do anything but retrench,” Robert McTeer, former president of the Fed Bank of Dallas, said in an Oct. 24 Bloomberg Television interview. “If they all do it at the same time, it will really tank the economy.”

Analysts from Citigroup Inc. (C) predict the United States could see an entire year of contraction before the economy gets back on track, shrinking throughout the first half of 2009.

“We are now expecting one of the sharpest recessions in the post-war period,” Citigroup’s Geoffrey Dennis and Jason Press wrote in a report to clients on Oct. 21.

Dennis and Press also predicted that U.S. unemployment could reach as high as 8.5%.

Source: Recession Fears Hit Home as World Markets Plummet and U.S. Economy Contracts

At the New York close on Friday, the blue-chip Dow Jones Industrial Average Index had plunged 312.62 points (-3.6%), to trade at 8,378.63. The tech-laden Nasdaq Composite Index shed 51.88 points (-3.23%), to reach 1,562.03. And the broader Standard & Poor’s 500 Index dropped 31.45 points (-3.46%), to hit 876.66.

“It’s a bear market on steroids,” David King, a money manager at Putnam Investments, who helps manage about $137 billion, told Bloomberg Television. “It’s very accelerated by the pace of financial markets today.”

Prior to the New York opening bell, pre-market traded futures for all three major U.S. indices fell their maximum allowed daily limit, causing safety measures to kick in and halt futures trading until the market’s open. Dow futures crashed 550 points, or 6.27%, to 8,224. The S&P 500’s futures index plunged 60 points, or 6.56%, to 855.20, and Nasdaq futures skidded 85 points, or 6.20%, to 1,175.75.

But despite the bleak picture futures painted, the U.S. markets recovered from the day’s deeper lows to close higher than originally indicated.

Commodities tumbled on fears of demand destruction from weak economic growth. Gold traded down to $681.00 an ounce from an opening level of $713.30. Oil also declined despite production cuts from the Organization of Petroleum Exporting Countries (OPEC). [For a related story in Money Morning on OPEC’s production cut, please click here.]

“Selling is across all asset classes,” Robin Bhar, a commodities analyst at Calyon in London, told Bloomberg News. “A month ago we were on the edge of a cliff and now we’re in freefall.”

In overseas markets, Japan’s Nikkei Index had an 811.90-point decline to close at 7,649.08, its lowest level in over five years. Hong Kong’s blue-chip Hang Seng Index plummeted 1,142.11 points to close at 12,618.40, its lowest level since August 2004.

“The market is pretty desperate and at a loss. Four days running of big losses, though the turnover is quite low,” Howard Gorges, vice chairman South China Securities, told Reuters, speaking of the Hong Kong markets. The Hang Seng Index has dropped 55% so far this year.

“People are just standing aside. These are dangerous markets to play around with. That’s the main reason for getting into cash,” Gorges said.

In Europe, major indices sunk on news that the United Kingdom’s gross domestic product contracted more than expected with a decline of 0.5% in the third quarter.

“We are obviously not sure exactly how this whole situation will develop. We’ve had some quite deep and severe recessions in the UK before, and hopefully we can avoid that sort of situation in the current circumstances, but the risks of that have increased,” Andrew Sentance, a member of the Bank of England’s rate-setting monetary policy committee, told BBC Radio Leeds.

The FTSEurofirst 300 Index of blue-chip European shares skidded 4.9% to close at 829.73 points, its lowest closing level since May 2003, Reuters reported.

The Paris-based CAC40, London’s FTSE 100, Madrid’s IBEX 35 and the Frankfurt-based DAX all posted triple-digit losses.

At the New York close, the dollar had gained ground against the euro [up 2.46%] and the pound sterling [up 2.02%], but lost ground against the yen [down 2.94%].

Source: Global Sell-Off Takes a Toll on U.S. Equities

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The rally in financial stocks led the three major indexes to post gains of more than 3%.

At the New York close, the blue-chip Dow Jones Industrial Average Index had posted a gain of 391.96 points (3.20%), to close at 12,654.85. The tech-laden Nasdaq Composite Index increased 82.14 points (3.60%), to reach 2,361.24. And the broader Standard & Poor’s 500 Index rose 47.17 points (3.57%), to hit 1,369.87.

All sectors were up with the financial sector (up 4.47%), the services sector (up 3.29%) and the technology sector (up 3.18%) posting the biggest gains.

In today’s going, stocks edged higher after a shaky start on hopes that Friday’s employment report will bring good news.

The Dow Jones industrial Average rose 21.25 points to 12,673.25, with 17 its 30 components trading lower.

Read on at MarketWatch.com.

“The stock market is beginning to offer some attractive bargains,” says Chris Mayer.

“Several great mutual funds, long closed to investors, are now open again for new investors. These include the Tweedy Browne Global Value Fund, the Longleaf Partners Fund, the First Eagle Global and Overseas funds, the Third Avenue International Value Fund and the First Pacific Crescent Fund. They’re open because they have more ideas than they have money. They want to buy.

“I’d give these funds a look, because they don’t tend to stay open for long. The opening of these funds, captained by investors with long track records of success, is also an indicator that the smart money is buying.”

Read on here.