Sam Collins

No Bottom in Sight

by Sam Collins   03/05/09

China announced an increase to its spending plan and the world markets rallied, including those in the United States. Higher prices followed five days of selling and focused on some of the big blue chips like Caterpillar (CAT), up 13%, and Alcoa (AA), up 13%.

The oils did well Wednesday, with Exxon Mobil (XOM) up more than 2% and Chevron (CVX) up 3%. Apache (APA) rose 7% and Occidental Petroleum (OXY) rose 8.3%.

But a bigger Dow (DJI) advance was thwarted by General Electric's (GE) dash to new lows. GE may lose its AAA rating and investors drove the stock almost 20% lower in anticipation of the downgrade. After assurances by management that it had a strong capital position, the stock rallied from its low and closed down only 4.6%. Despite the statements from GE, worries have increased that the company can retain its rating.

Big Lots (BIG) and BJ's Wholesale (BJ) reported better-than-expected earnings. And Google's (GOOG) CEO bemoaned the state of the economy and said that Google was not immune to its impact. The stock closed lower by 2.02%.

At the close, the Dow Jones Industrial Average (DJI) had gained 150 points to 6,876, the S&P 500 (SPX) rose 17 points to 713, and the Nasdaq (NASD) was up 33 points to 1,354.

The New York Stock Exchange traded 1.8 billion shares, with advancers ahead of decliners by 6-to-1. The Nasdaq crossed 900 million shares by over 2-to-1.

The April crude oil contract gained $3.73 to $45.38 a barrel, and the Amex Energy SPDR (XLE) closed at $40.14, up $1.83.

Gold futures fell again. It was the eighth-straight loss for gold, and the April contract ended the day at $906.70, off $6.90. The PHLX Gold/Silver Index (XAU) gained 2 cents, closing at $113.48.