Wall Street closed out the disastrous 2008 year on a sharply higher note, with the Dow rising more than 100 points on Wednesday after traders got a better-than-expected labor report.
Oil stocks moved higher after Russia said it would cut off supplies to the Ukraine starting tonight.
Today’s Markets
At the 4 p.m. close in New York, the Dow Jones Industrial Average gained 108 points, or 1.25%, to 8776.39. The broader S&P 500 Index rose 12.61 points, or 1.42%, to 903.25 and the Nasdaq Composite rose by 26.33 points, or 1.7%, to 1577.03. The consumer-friendly Fox 50 Index rose by 8.87 points, or 1.3%, 690.59.
In a year that pummeled the markets and the economy, the Dow fell 34% this year, while the broader S&P500 Index dropped more than 40% this year alone.Those losses were the worst since 1931. Even the technology-heavy Nasdaq suffered in 2008, with that index falling 40.5% in 2008 -- the worst annual drop in that index's history, surpassing even the 2000-2001 dotcom bubble.
The only Dow members that posted gains for the year were Wal-Mart (WMT), which rose 15.8% in 2008, and fast food giant McDonald's (MCD), which gained 4.8%. General Motors (GM) was the worst performing current member of the Dow, falling nearly 85% for the year.
If American International Group (AIG), which was removed from the Dow in September after falling victim to the fall credit crisis, was included as a member of the index, it would be the worst performer of 2008. The once-mighty insurance company fell 97.3% this year alone.
Trading was light for the New Year's Eve session, with little more than 900 million shares traded by mid afternoon. All markets will be closed on New Year's Day and will reopen on Friday for a full trading session.The markets are expected to be back in full force next week.
Leading the Dow higher today was the energy stocks ExxonMobil (XOM) and Chevron (CVX), as oil jumped by more than $6 in trading. Oil gained $5.01 to $44.00 a barrel in NewYork while gold was higher by $10.90 to $880.00 a troy ounce.
Oil was moving higher after Russia said it would stop supplying gas to Ukraine, a key transit country for Russian gas to Western Europe, starting 10 a.m. Moscow time on New Years Day.
Citigroup (C) made news in the last hour of trading after Citi said after issuing $20 billion of its perpetual preferred stock to the U.S. Treasury Department as part of the Troubled Asset Relief Program.
In addition, Citigroup agreed to a new compensation plan for its executives and the company’s Chief Executive Vikram Pandit, advisor Robert Rubin and Chairman Win Bischoff would not receive bonuses for 2008 or 2009.
On the economic front, the initial jobless claims report came in better than expected. The report was released a day early because of the holiday.
The U.S. Labor Departments reported initial claims for jobless benefits fell by 94,000 to a seasonally adjusted 492,000 in the week ended Dec. 27. The drop of 94,000 was the largest since 141,000 since August 1992.
Economists interviewed by Thomson Reuters expected initial jobless claims, on average, to fall by 36,000 people to 550,000. The fall in the jobless claims, while positive, may be more of a result of the shortened work week last week because of Christmas.
The oil markets, once the bull market of note for the first half of this year, fell by nearly 60% this year as well.
Company News
GMAC, the financing division of General Motors (GM) said $21.2 billion in notes was tendered in its note exchange, which it offered raise capital for its new status as a bank-holding company. The company wanted to raise $30 billion.
PC manufacturer Dell (DELL) said its president and chief marketing officer would be leaving the company as of Jan. 31 as part of a company reorganization. Dell also said it would restructure its operations around three major markets: public, enterprise and personal computing.
A pricing dispute between Time Warner Cable (TWC) and Viacom (VIA) became public Wednesday, with Viacom threatening to pull its channels from Time Warner by midnight tonight. Viacom owns MTV, Nickelodeon and various other channels while Time Warner is the primary cable company for NewYork City.
Soft drink company PepsiCo (PEP) Wednesday said it was ending its endorsement deal with soccer player/celebrity David Beckham. The deal was reported at nearly $3 million a year, according to the British newspaper Daily Mail. The decision was described as “mutual.”
Global Markets
Several of the European markets were closed for New Years Eve, however London's market rallied slightly on Wednesday by a little less than 1%.
The FTSE 100 closed up 41.49 points to 4434.17. That index fell by 31% in 2008, the smallest decline of the European markets, point-wise.
France's CAC40 index rose by 0.84 points to 3217.97 on Wednesday, setting the CAC's decline in 2008 to 43%.
A Little Merry Christmas for Wall Street
Jobless claims make surprise jump
