U.S. Stocks Rise, Trimming Worst Yearly Drop Since Depression
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Dec. 31 (Bloomberg) -- U.S. stocks gained for a second day, trimming losses at the end of the market’s worst year since the Great Depression, as fewer Americans filed for jobless benefits and the Treasury said it will expand aid...
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Dec. 31 (Bloomberg) -- U.S. stocks gained for a second day, trimming losses at the end of the market’s worst year since the Great Depression, as fewer Americans filed for jobless benefits and the Treasury said it will expand aid to the car industry. Macy’s Inc. and Starwood Hotels & Resorts Worldwide Inc. climbed more than 9 percent as initial unemployment claims dropped by 94,000 last week to the lowest level in almost two months. Lear Corp., the world’s second-biggest maker of vehicle seats, jumped 23 percent after the Treasury said it may provide funds to more companies in the auto industry. Stocks in Europe and Asia advanced, paring the biggest annual declines on record for regional indexes. “They will write about this year for a long time,” said Duncan Niederauer, chief executive officer of NYSE Euronext, operator of the New York Stock Exchange. “It’s been, in one word, tiring.” The S&P 500 rose 1.4 percent to 903.25, paring this year’s tumble to 38.5 percent. The Dow Jones Industrial Average added 108 points, or 1.3 percent, to 8,776.39, down 34 percent in 2008. The MSCI Europe Index increased 0.8 percent and trimmed its yearly loss to 45.5 percent. The MSCI Asia Pacific Index gained 0.1 percent, ending 2008 with a plunge of 43 percent. Jobless Claims All 10 of the main industry groups in the S&P 500 advanced today after the Labor Department said new jobless claims were depressed by the shortened Christmas workweek even as the total number of people collecting benefits reached a 26-year high. Benchmark indexes jumped to their highs of the day after the Treasury said it drafted broad guidelines to rescue any company deemed important to making or financing cars. Macy’s, the second-largest U.S. department-store company, climbed 94 cents to $10.35. Starwood added $1.53 to $17.90. Lear rose 26 cents to $1.41. At its lowest closing level of 2008 on Nov. 20, the S&P 500 was down 49 percent for the year and 52 percent from its Oct. 9, 2007, record of 1,565.15. The plunge came as more than $1 trillion in credit-related losses at global financial companies dragged the U.S., Europe and Japan into the first simultaneous recessions since World War II. The S&P 500 has rebounded 20 percent since its 11-year low on Nov. 20. The gains came as the government rescued Citigroup Inc., President-elect Barack Obama pledged to stimulate growth with spending on infrastructure projects and the Federal Reserve cut interest rates to as low as zero to combat the worst financial crisis in seven decades. ‘How Deep’ “What’s going to determine the equity market is how deep the recession is going to be,” said Noman Ali, a portfolio manager at MFC Global Investment Management, which oversees $20 billion of U.S. stocks in Toronto. Policy makers “are going to throw everything at it to prevent a deep recession, but it’s still going to be pretty bad because credit markets are still closed and investors are not taking any risk.” China’s CSI 300 Index fell for an eighth straight day today, capping the gauge’s first annual decline since it was introduced in April 2005. The index tracking yuan-denominated A shares lost 66 percent in 2008 as economic growth cooled and exports shrank. Stock measures in the other three so-called BRIC nations -- Brazil, Russia and India -- all lost more than 41 percent this year as the global economic slump reduced demand for commodities and investors shunned riskier assets. “Most of us in the market are going to be very happy for the calendar to tick over to 2009,” said James Gaul, a money manager at Boston Advisors LLC, which oversees about $1.5 billion in Boston. “I’m slightly optimistic on 2009, but I think there’s still some major hurdles to get through, not the least of which is investor psychology. It’s been so bad, and people have gotten burned in such a severe way.” 2008 Declines Financial companies tumbled the most among the 10 main industries in the S&P 500 this year, falling 57 percent collectively for the worst drop in the 19-year history of the index tracking the group. The retreat was driven
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“They will write about this year for a long time,” said Duncan Niederauer, chief executive offi...
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