Stock Market News for April 16, 2009

A late afternoon rush of buying activity pushed the three major indices to their session high on Wednesday. The market's key indicator of volatility, the CBOE Vix, dropped to its lowest since last September. Bears of junk-bond action and IPO deals woke up from a long slumber as HCA sold $1.5 billion in junk bonds, Crown Castle (NYSE:CCI - Analyst Report) $1.2 billion in notes, Rosetta Stone (NYSE:RST - Snapshot Report) IPO priced above its expected range, and USAA sold $1.125 billion in debt backed by auto loans not guaranteed by government TALF.  The events indicated increased willingness to assume risk. The DJIA closed above the 8000 level, with a gain of 1.4%. The S&P 500 pushed above 850 with a 1.3% advance. The tech-heavy NASDAQ, held back by caution in Intel's (NASDAQ:INTC - Analyst Report) outlook, edged 0.1% higher. Trading on the NYSE was a modest 1.5 billion shares, as advancing issues outran decliners by more than a 2 1/2 to 1 ratio.

Of the ten S&P sectors, only technology shares ended in the red, with a loss of 0.6%.  Hurting the tech stocks was Intel (NASDAQ:INTC - Analyst Report), which predicted flat- to-slightly lower second quarter revenues, and an unwillingness to provide a clear revenue forecast due to the current economic uncertainty.  This morning world's largest mobile phone manufacturer Nokia (NYSE:NOK - Snapshot Report) reported sales of 19% fewer phones during the quarter, and predicted a 10% volume decline in 2009.

Financials, up 4.9%, nevertheless helped markets’ northward journey, as investors looked forward to improved quarterly results following Goldman Sachs' (NYSE:GS - Analyst Report) impressive numbers. This morning's results from JP Morgan (NYSE:JPM - Analyst Report), also beat analyst expectations, with earnings of $2.1 billion, or 40 cents per share on $25 billion in revenues, beating Street estimates of 32 cents a share. American Express (NYSE:AXP - Analyst Report) was the leading gainer on the DJIA with an 11.9% gain after its regulatory filing showed the firm wrote off a lower percentage of loans in March.

Sector gains of more than 1% were posted by consumer goods (+1.9%), industrials (+1.3%), utilities (+1.4%), basic materials (+1.2%), and telecom (+1.0%).  Stocks advanced helped by hopes that the economy is providing some sense of stabilization. Yesterday's late afternoon post of the Fed's Beige Book notably showed 5 of the 12 Fed districts indicated the contraction is showing signs of slowing. Housing offered signs of stabilizing, but unemployment outlook continued to disappoint, and manufacturing and consumer spending activity contracted. Housing received more positive news from April's homebuilder sentiment index, up 11.7% to its highest since last October. Standard Pacific (NYSE:SPF - Snapshot Report) shares jumped 35.0%, Lennar (NYSE:LEN - Snapshot Report) 11.7%, and KB Home (NYSE:KBH - Snapshot Report) 10.5%. Today's news, however, contains the bankruptcy filing of US' second largest mall-owner, General Growth Properties (NYSE:GGP - Analyst Report) suffering under its $24 billion load of debt, one of the largest real estate failure in US history.

Manufacturing numbers reflected continuing weakness with industrial production at US factories, mines and refineries declining 1.5% in March. Capacity utilization at those factories was down to a record low.  Weekly crude inventory levels reached an 18-year high, more than doubling analyst predictions, as demand remained weak.

Today's economic posts cover keys areas of concern. Housing starts and building permits for March are expected to decline, with permits estimated off to 549,000 and starts down to 540,000. Weekly unemployment claims are likely to rise to 658,000 from 654,000, with continuing claims also rising, reaching 5,893,000 from 5,840,000. The Philly Fed post is estimated at -32.0 versus the prior month's 35.0. Among Fed-speak, Lockhart speaks on the financial crisis at 1:00 PM ET; Yellen on lessons for central bankers at 7:30 PM ET. Key corporate earnings reports are expected from: Google (NASDAQ:GOOG - Analyst Report), Gannett (NYSE:GCI - Snapshot Report), Nokia (NYSE:NOK - Snapshot Report), Southwest Airlines (NYSE:LUV - Snapshot Report).