Stocks churned Wednesday
morning, as investors digested the previous session's massive rally and
geared up for an expected interest rate cut from the Federal Reserve.
A surprise jump in durable goods orders, Procter & Gamble's better-than-expected results and GM's weak global sales report were also in the mix.
On Tuesday, the Dow surged 889 points, its second-best single-day point
gain ever, as investors scooped up a variety of shares hit in the
recent retreat. In percentage terms, the advance of 10.9% was the sixth
biggest ever. The S&P 500 jumped 10.8% and the Nasdaq composite
jumped 9.5%.
Meanwhile, the credit market continued to improve, with Libor, the
overnight bank-to-bank lending rate, falling to 1.14% from 1.24% the
previous day, according to Dow Jones. The 3-month Libor fell to 3.42%
from 3.47%.
Treasury prices slipped, raising the yield on the benchmark 10-year note yield to 3.81% from 3.77% late Tuesday.
The Commerce Department said new orders for big-ticket items -
including cars and appliances - rose 0.8% in September versus forecasts
for a drop of 1.1%. Orders fell a revised 5.5% in August.
Dow component Procter & Gamble reported higher quarterly
sales and earnings in the fiscal first-quarter that topped estimates.
However, the consumer products maker also said that full-year earnings
could be weaker than previously expected. P&G fell 3%.
Fellow Dow component General Motors reported a steep drop in global
third-quarter sales. North American sales fell 19% in the quarter
versus a year ago. GM shares rose 3.5%.
Another Dow component, Kraft Foods, said third-quarter profit more than
doubled due to a one-time gain resulting from its $2.6 billion sale of
its Post cereals unit.
U.S. light crude oil for December delivery rallied $3.84 to $66.57 a barrel, after ending the previous session at a 17-month low.
Gasoline prices fell another 4 cents overnight, to a national average
of $2.589 a gallon, according to a survey of credit-card activity by
motorist group AAA. It was the 42nd consecutive day that prices have
decreased. During that time, prices have fallen by $1.26 a gallon, or
nearly 33%.
COMEX gold for December delivery rallied $22 to $762.50 an ounce.
