Stock Market News for November 3, 2009

After the previous session’s battering, markets registered modest gains Monday as a slew of favorable economic data sent traders back on the buying table.  However, broader concerns about the state of the economy and the health of the financial sector kept sentiments shaky on the Street as the Dow average wavered in a 180-point range.  President Obama’s warning that the economy would see more job losses in the coming weeks added to the bearish mood.

The DJIA closed up nearly 77 points, or 0.8%, at 9789 Monday, with the S&P500 up 0.7% to 1042, and the NASDAQ up 0.2% to 2019.  On the NYSE, a moderate 1.54 billion shares exchanged hands as advancing shares narrowly edged ahead of decliners by an 8 to 7 margin.  The Vix volatility measure continued above the 30 level for most of the day, before finishing off 3% at 29.78.

In front of today’s FOMC meet, the greenback traded lower Monday, off 0.1%, reversing last week's gains.  Expectations are that the interest rates would be held steady at current levels.  However, there could be a change of tone in Fed’s accommodative tone. Should the Fed decides to shift its focus away from maintaining lower interest rates for an “extended term,’” fears of an early exit would begin to take shape and that could stifle a nascent recovery.

Meanwhile, on Monday Ford (NYSE:F - Analyst Report) shares soared 8.3% Monday, following the company’s almost $1 billion quarterly profit, its first quarterly profit in over a year, as well as improved guidance for 2010.  CIT Group Inc. (NYSE:CIT) plunged 65% to 25 cents after it filed for bankruptcy in an effort to cut $10 billion in debt following a failed debt exchange and U.S. taxpayer bailout.  Motorola Inc. (NYSE:MOT - Analyst Report) jumped 5.4% to $9.03 after Citigroup (NYSE:C - Analyst Report) raised the U.S. mobile-phone maker to “buy” from “hold,” citing a “compelling” offer of handsets at a “time when many investors have given up.”

Nearly tripping yesterday's gains, Jon Greenlee, associate director of the Fed's Division of Banking Supervision and Regulation, warned US banks face the risk of large additional loan losses, especially on bad commercial real estate loans, with some lacking adequate capital cushions to protect against the losses.  Financials, initially were under pressure following the report, closed up 0.7% on the session.