Wednesday Wrap - Dow +0.55%, S&P +0.61%, ND +0.56%

by: Roy Mehta

Stocks had a nice run Wednesday, getting some support on upbeat news from GM and Bear Stearns. The Dow Jones Industrial Average was up 99.50 points (+0.72%), the S&P 500 increased 8.21 points (+0.54%), and the Nasdaq Composite Index ended 15.58 points higher (+0.58%). Volume came in at 1.29 billion shares on the NYSE, with advancers taking decliners 2:1.

The markets started strong off news from GM,who announced it had come to terms with the UAW, ending the two day strike (full story). Durable goods order, announced before the open, fell 4.9% in August. Excluding transportation, orders fell 1.8%. Though the numbers were less than expected, investors seemed to ignore the news (full story). In the afternoon, the New York Times announced that a source had told them that Bear Stearns was in serious talks to sell a 20% stake to outside investors including Warren Buffet, Bank of America, Wachovia, and two Chinese banks (full story). The US 10-year treasury ended up 3/32 in price, pushing yields down to 4.62%.

All sectors finished positive, with consumer discretionary (+1.0%), consumer staples (+0.9%) and materials (+0.9%) leading the pack. Despite a bearish inventory report, oil added 77 cents ending at $80.30/barrel. GM (+9.4%) and Bear Stearns (+7.7%) had solid returns, but Sallie Mae (-2.7%) shares fell as the agreed to $25 billion buyout of the lender looks like it is going to fall through, because the buyers want to back out. Goldman lowered its earnings forecast for Merrill Lynch (-0.5%).

Look for the final Q2 GDP Report (8:30 AM), Initial Jobless Claims (8:30 AM), Help-Wanted Index (10:00 AM), and New Home Sales (10:00 AM) to all be released tomorrow. As we come to the end of the quarter, look for a little more volatility and perhaps some buying, as managers who were surprised by the interest rate cut look to go long.

Sources:, Yahoo
Commentary: Monsanto Jumps on Exec Comments and Buy RatingCitic to Give U.S. Brokers a Run for Their Money
Stocks/ETFs to watch: GM, BSC, MER, SLM

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