Stocks Rebound From Monday’s Loss/Dollar Gains On Yen
Stocks Rebound From Monday’s Loss/Dollar Gains On Yen
The automakers reported dismal sales results for November on Tuesday. General Motors, Ford, Toyota and Chrysler said U.S. sales during the month declined more than 30% as the job market shrank and housing continued to decline. Toyota, Asia’s largest automaker saw sales plunge 34%, the most since 1987. Chrysler’s sales total fell to a 14-year low, GM’S sales dropped 41%, and Ford’s 31%.
President-elect Obama pledged to work quickly on an economic recovery plan to include tax cuts and increased federal spending at a meeting with the nation’s governors on Tuesday.
“We intend to put tax cuts into the pockets of hard-pressed middle class families, and we intend to make a down payment on the investments we need to build a strong economy for years to come,” Obama said to the governor’s group of whom many are struggling with budget deficits as a result of the recession.
“Forty-one states are likely to face budget shortfalls this year or next, forcing you to choose between reining in spending and raising taxes,” Obama said. “Programs for the needy are at risk. Libraries, parts and historic sites are being closed.”
Despite the bad news on the auto front, markets managed to make a nice recovery from Monday’s steep losses. At the close of floor trading on the NYSE, the DOW was on 8420.05 after gaining 270.96 points (3.33%). The S&P closed on 848.84, up 32.63 points (4.00%) while the NASDAQ finished the day’s trading on 1449.80 with a gain of 51.73 points (-8.95%). Bonds were bought heavily and after Federal Reserve Chairman Ben Bernanke said on Monday that the Fed may purchase longer-dated treasuries. The yield on the 2-year note fell 0.8 basis points to 0.90% while yield on the 10-year note lost 3.9 basis points to 2.681%. The dollar traded in risk-acceptance mode for most of the day, with losses of 0.80% on the euro, 0.07% on the pound and 0.61% on Australia’s dollar while it rose 0.09% against the yen.
NYMEX crude for January delivery fell $1.97 (-4.00%) to $47.31 per barrel, its lowest price in nearly three years.
COMEX gold for February delivery gained $5.70 (0.73%) to $782.50 per ounce.
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