Dow in triple-digit rally

NEW YORK (CNNMoney.com) -- Stocks rallied Tuesday as better-than-expected quarterly results from Merck and Barclays reassured investors, and the weaker dollar boosted commodity prices and shares.

A bigger-than-expected rise in a measure of manufacturing activity in the New York area and some strength overseas added to the momentum.

The Dow Jones industrial average (INDU) rose 170 points, or 1.7%, according to early tallies. The S&P 500 index (SPX) rose 19 points, or 1.8%. The Nasdaq composite (COMP) rose 30 points, or 1.4%.

"Between the good manufacturing report this morning, international markets rising and people wanting to come back in after a holiday weekend, there were plenty of reasons for stocks to rise today," said Kenny Landgraf, principal and founder at Kenjol Capital Management.

The stock advance was broad based, with 28 of 30 Dow components rallying, led by Boeing (BA, Fortune 500), United Technologies (UTX, Fortune 500), Chevron (CVX, Fortune 500), Exxon Mobil (XOM, Fortune 500), 3M (MMM, Fortune 500), Caterpillar (CAT, Fortune 500) and Procter & Gamble (PG, Fortune 500).

Dow component Merck also rose after its quarterly results. Dow financial companies gained too, including American Express (AXP, Fortune 500) and Bank of America (BAC, Fortune 500), as part of a bigger run in the sector after British bank Barclays said profit more than doubled last year.

The KBW Bank (BKX) sector index added 2.9%.

Wall Street managed gains last week, after four weeks of declines, but the advance was tepid amid worries about China's plans to curb lending and the threat of Greece's debt crisis spreading. Those worries were set aside Tuesday as investors focused on some of the stocks that were hit in the recent selloff.

Landgraf said that there had been so much bad news over the last few weeks in terms of issues abroad that most people who were going to sell already did it. Since about the middle of last week, the tone has been better, with buyers starting to come back in at lower levels.

Between rally highs hit on Jan. 19 and the lows of early February, the S&P 500 fell more than 9% and the Dow and Nasdaq lost more than 7%.

U.S. markets were closed Monday for Presidents Day.

Quarterly results: A handful of influential companies report results this week, although the bulk of the reporting period has already passed.

Two Dow companies released results Tuesday morning.

Merck (MRK, Fortune 500) reported higher quarterly revenue that beat estimates on higher earnings that were in line with analysts' estimates. The drugmaker said it won't issue 2010 guidance until April. Shares gained 1%.

Kraft Foods (KFT, Fortune 500) reported higher quarterly earnings that topped estimates on higher quarterly revenue that missed analysts' estimates.

The food maker said the sale of its frozen pizza business to Nestle (NSRGY) will cut 5 cents per share from earnings annually, but its recent buy of British chocolate maker Cadbury will speed up long-term growth. Kraft shares fell 1.5%.

With 379 companies, or 76%, of the S&P 500 having reported, fourth-quarter earnings are on track to have risen 208% from a year earlier, according to Thomson Reuters. Revenues are set to rise 8%. Stripping out the buoyant financial sector, earnings are set to rise 16% and revenues 3%.

Other company news: No. 1 shopping mall owner Simon Property Group (SPG) made a $10 billion hostile bid for troubled rival General Growth Properties. The deal would allow the No. 2 owner of malls to emerge from bankruptcy. Simon shares gained 3.5%.

Manufacturing: The Empire State index, a read on manufacturing in New York State, rose to 24.91 in February from 15.92 previously. Economists surveyed by Briefing.com thought it would rise to 18.

World markets: In overseas trading, European markets ended higher and Asian markets finished mixed.

The dollar and commodities: The dollar fell versus the euro and gained against the Japanese yen.

The dollar's weakness versus the euro gave a boost to dollar-traded commodity prices.

U.S. light crude oil for March delivery rose $2.88 to settle at $77.01 a barrel on the New York Mercantile Exchange.

COMEX gold for April delivery rose $29.80 per ounce to settle at $1,119.80.

Bonds: Treasury prices fell, raising the yield on the 10-year note to 3.67% from 3.69% late Friday. Treasury prices and yields move in opposite directions. The Treasury market was closed on Monday for Presidents Day.

Market breadth was positive. On the New York Stock Exchange, winners topped losers four to one on volume of 640 million shares. On the Nasdaq, advancers beat decliners two to one on volume of 1.47 billion shares. 

Dow gains 100 points as Greek debt fears ebb

NEW YORK (CNNMoney.com) -- Stocks rallied Thursday after the European Union's promise to help debt-ridden Greece eased worries that a default might hurt global markets.

The Dow Jones industrial average (INDU) rose 106 points, or 1%, according to early tallies. The S&P 500 index (SPX) gained 10 points, or 1.4% and the Nasdaq composite (COMP) added 29 points, or 1.4%.

Stocks slid in the morning, but managed to turn up after the European leaders promised to help Greece, although details were scarce.

The announcement gave investors the impetus to push the Dow back above the 10,000 mark, which it has been straddling for the last week.

The easing of concerns that Greece and other debt-ridden nations might default enabled investors to take on more risk, including stocks and commodities. The dollar remained stronger versus the euro and weaker versus the yen.

Gains were broad based, with 28 of 30 Dow stocks advancing, led by Boeing (BA, Fortune 500), Caterpillar (CAT, Fortune 500), Chevron (CVX, Fortune 500), Hewlett-Packard (HPQ, Fortune 500), IBM (IBM, Fortune 500) and 3M (MMM, Fortune 500).

Wary after the retreat: Investors have been cautious after a big selloff in January.

Between the rally high on Jan. 19 and the recent low hit last week, the S&P 500 fell 9.2%, getting close to the 10% decline that is the technical definition of a correction.

Stocks fell Wednesday on concerns about the Greek debt situation, the strong dollar and the Federal Reserve's plan to withdraw some of the trillions of dollars it has used to bolster the nation's financial system.

The Dow, S&P 500 and Nasdaq have all declined the past four weeks, as investors have overlooked improved quarterly profits and some positive signs in the economic reports.

Markets remain vulnerable to a pullback following last year's big rally, in which the S&P 500 gained 23%. Between bottoming at a 12-year low in March of 2009 and the end of the year, the S&P 500 gained 65%.

Debt crisis: European leaders have reached a deal to help debt-ridden Greece avoid defaulting on its debt, although details were not expected to be finalized until Monday.

The intervention marks the first time the 16-nation bloc that shares the euro currency has had to bail out a member since the currency zone was created 11 years ago. The deal is expected to involve some form of loans.

Worries that a Greek default would spread to other debt-ridden European nations and destabilize the euro have dragged on global markets for weeks. Portugal, Italy, Ireland and Spain are also heavily debt-laden.

The concern had caused a flight from risk, with investors dumping the euro, U.S. stocks and commodities, and putting money into the dollar and government debt.

Economy: The number of Americans filing new claims for unemployment fell to 440,000 last week from 483,000 in the previous week. Economists surveyed by Briefing.com thought claims would fall to 465,000.

Continuing claims, a measure of those who have been receiving benefits for a week or more, fell to 4,538,000 from 4,617,000 in the previous week. Economists expected 4.6 million claims.

Economists say as many as 150,000 jobs could be lost in February following back-to-back blizzards in the Northeast region, with the storms keeping people home from work and stalling hiring.

A separate report showed foreclosure filings fell almost 10% in January versus the previous month. However the report from Realty Trac also showed that filings rose 15% from a year earlier.

Company news: Boston Scientific (BSX, Fortune 500) reported a smaller quarterly loss versus a year earlier on higher quarterly sales. The medical device maker also announced a restructuring, including a cut of between 8% and 10% of its workforce. Shares fell 10% in unusually active New York Stock Exchange trading.

Power company FirstEnergy (FE, Fortune 500) said it is buying Allegheny Energy (AYE) in an all-stock deal worth $4.7 billion. Shares of Allegheny rallied 11.8% in active New York Stock Exchange trading.

World markets: European markets ended mixed, with London's FTSE 100 up 0.6% and France's CAC 40 down 0.5%. Asian markets ended higher.

The dollar and commodities: The dollar rallied versus the euro and fell against the Japanese yen.

U.S. light crude oil for March delivery rose 76 cents to settle at $75.28 a barrel on the New York Mercantile Exchange.

COMEX gold for April delivery rose $18.40 to settle at $1,094.70.

Bonds: Treasury prices fell, raising the yield on the 10-year note to 3.71% from 3.68% late Wednesday. Treasury prices and yields move in opposite directions. 

HK shares higher at midday

STI higher at midday

Stocks dip on Bernanke plan, Europe worries

NEW YORK (CNNMoney.com) -- Stocks struggled Wednesday as investors weighed the Greek debt situation, a stronger dollar and Fed chairman Ben Bernanke's outline for eventually taking away some of the trillions of dollars used to bolster the nation's financial system.

The Dow Jones industrial average (INDU) lost 20 points, or 0.2%, according to early tallies. The S&P 500 index (SPX) lost 2 points, or 0.2%, and the Nasdaq composite (COMP) lost 3 points, or 0.1%.

Stocks rallied Tuesday as growing bets that the European Union will rescue Greece from its debt problems reassured investors after a four-week selloff. But stocks were choppy Wednesday on concerns that Greece is just the first of many countries that is feeling the pressure of a growing deficit.

Stocks also remain vulnerable to a retreat in the aftermath of 2009's big rally, in which the S&P 500 gained 23%. In the last nine months of 2009, it gained 65%, bouncing off 12-year lows hit in March.

"Greece's issues will get addressed, but I wouldn't be surprised to see a bigger market pullback in the weeks ahead anyway," said Tim McCandless, senior equity analyst at Bel Air Investment Advisors.

However, he said that a larger retreat would probably be met with buyers stepping in at lower levels. Since hitting a rally high on Jan. 19, the S&P 500 is down almost 7%, as of Wednesday's close.

Bernanke's comments on the Fed's plans to wind down its extraordinary measures to bolster lending and the strengthening of the dollar versus the euro were also in play Wednesday.

Bank shares bounced up after several down sessions, countering some of the broader weakness in the market. The KBW Bank (BKX) index gained 1%.

Bernanke: The Federal Reserve Chairman said that while the U.S. economy continues to require the support of emergency programs the Fed enacted at the height of the financial crisis, "at some point the Federal Reserve will need to tighten financial conditions."

He said that the Fed will pull cash from the system before it lifts interest rates, and that its decision to boost the emergency "discount" rate is not the same as a shift in policy. The prepared testimony was meant to be delivered at a House Financial Services Committee hearing that was postponed due to snow.

Debt crisis: Reports late Wednesday said France and Germany may present a rescue plan for Greece at Thursday's meeting of euro zone countries. Meanwhile, Greece has vowed to press forward with cutbacks, despite an ongoing worker strike.

Although Greece's impact is small, the threat of a default there has intensified worries about other debt-challenged European countries, including Spain, Portugal, Ireland and Italy. A crisis overseas would set back the still-fragile global economic recovery and hurt U.S. financial institutions. Investors are also keeping an eye on the growing U.S. budget deficit.

"Even if the EU comes in and stabilizes the debt issue in Greece, my concern is that we still have so much debt around the globe that hasn't been addressed," said Dean Barber, president at Barber Financial Group.

The debt crisis has sparked something of a flight from risk over the last few weeks, with investors choosing government bonds and the dollar over stocks. Investors have fled the euro in favor of the greenback and have sold dollar-traded commodities, commodity stocks and a broad swath of securities in other sectors.

The Dow, S&P 500 and Nasdaq have all declined the past four weeks, despite improved quarterly earnings and revenues, and some positive signs in the economic reports.

Despite Tuesday's rally, the market is likely to stay a "choppy mess" for a while, Barber said.

Economy: The December trade gap widened to $40.2 billion in December from a revised $36.4 billion in November, the government reported Wednesday morning. Economists surveyed by Briefing.com thought it would narrow to $35.8 billion. The widening reflected a pick-up in imports amid the recovering economy.

Walt Disney: The media behemoth reported higher-than-expected quarterly earnings and revenue in a report released after the close of trading Tuesday. Disney (DIS, Fortune 500) shares fell 1%.

World markets: European markets mostly ended higher, while Asian markets ended with strong gains.

The dollar and commodities: The U.S. dollar rallied versus the euro and the Japanese yen.

U.S. light crude oil for March delivery rose 77 cents to settle at $74.52 a barrel on the New York Mercantile Exchange.

COMEX gold for April delivery fell 90 cents to settle at $1,076.30.

Bonds: Treasury prices fell, raising the yield on the 10-year note to 3.64% from 3.63% late Tuesday. Treasury prices and yields move in opposite directions.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by eight to seven on volume of 780 million shares. On the Nasdaq, decliners beat advancers seven to six on volume of 1.73 billion shares.  

Stocks rally on Greek bailout hopes

NEW YORK (CNNMoney.com) -- Stocks rallied Tuesday as growing bets that European officials will rescue Greece from its debt problems reassured investors after a four-week selloff.

After the close, Dow component Walt Disney (DIS, Fortune 500) reported higher-than-expected quarterly earnings and revenue. Shares rose 2% in extended-hours trading.

According to early tallies, the Dow Jones industrial average (INDU) added 150 points, or 1.5%, after having risen as much as 230 points earlier in the session. It was the Dow's biggest one-day point advance since Jan. 4, when it gained 155.91.

The S&P 500 index (SPX) rose 14 points, or 1.3% and the Nasdaq composite (COMP) gained 25 points, or 1.2%.

"The prospect of the EU helping out Greece is a sigh of relief, but I really think today is mostly a bounce after the selloff," said Scott Armiger, portfolio manager at Christiana Bank & Trust.

He pointed out that last week, stocks rallied the first two sessions of the week before sliding later in the week. "Today is a good day, but it's only Tuesday," he said. "We need to see how the week plays out."

The threat of a default in Greece has sparked fears of a broader crisis that could impact Portugal, Spain, Ireland, Italy and other debt-challenged European nations. U.S. investors have been trying to gauge what kind of impact such a crisis would have on financial institutions as well as the still-fragile global economic recovery.

News that European Union leaders will meet Thursday to discuss how to manage a growing debt crisis reassured investors. Additionally, Greece said it's raising the retirement age and asking civil servants to accept bonus cuts.

European Central Bank president Jean-Claude Trichet is reportedly leaving a conference in Australia early to join the Thursday meeting. And the Wall Street Journal reported Germany is considering a plan to work with other EU members to offer loan guarantees to Greece and other troubled euro zone countries.

Pop after the fizzle: Stocks have fallen for four weeks straight on worries about China curbing bank lending, Washington cracking down on bank trading practices, and more recently, Europe's debt woes.

Since peaking at a rally high on Jan. 19, the Dow has lost 7.6%, the S&P 500 has lost 7.3% and the Nasdaq has lost 8.4%.

"I don't see this as much more than a reflex rally after the downtrend," said Mike Stanfield, chief investment officer at VSR Financial Services.

"There's still a lot of uncertainty about the economic and political environment going forward," he said. "It wouldn't be surprising to see the first half of the year be something of a consolidation period."

On the move: Financial shares bounced Tuesday, with the KBW Bank (BKX) index rising 1.5%. The index has slipped nearly 5% since the stock market peaked on Jan. 19.

Big energy stocks including Exxon Mobil (XOM, Fortune 500) and Chevron (CVX, Fortune 500) rallied as the dollar slipped versus the euro. Barrick Gold (ABX), Goldcorp (GG) and Alcoa (AA, Fortune 500) were among the other big commodity shares rising.

Caterpillar (CAT, Fortune 500) gained after it was reportedly upgraded to "overweight" from "underweight" by Morgan Stanley.

Economy: Wholesale inventories fell by 0.8% in December after rising 1.6% in November, according to a government report released in the morning. Economists surveyed by Briefing.com thought inventories would rise 0.5%, on average.

Toyota: Following its recalls totaling 8.1 million vehicles for accelerator problems, troubled automaker Toyota Motor (TM) announced another global recall involving 437,000 hybrids, including the 2010 Prius, for problems in their anti-lock braking systems software.

Earnings: Coca-Cola (KO, Fortune 500) reported fourth-quarter earnings of $1.54 billion or 66 cents per share, up 55% from a year earlier and in line with analysts' estimates. The Dow component reported revenue of $7.51 billion, up five percent from a year ago and better than expected.

Shares of Coca-Cola rose 2.6%.

Commodities: U.S. light crude oil for March delivery rose $2.56 to settle at $73.75 on the New York Mercantile Exchange.

COMEX gold for April delivery rose $11 to settle at $1,077.20.

Bonds: Treasury prices tumbled, raising the yield on the 10-year note to 3.61% from 3.56% late Monday. Treasury prices and yields move in opposite directions.

Market breadth was positive. On the New York Stock Exchange, winners topped losers three to one on volume of 1.24 billion shares. On the Nasdaq, advancers beat decliners by over two to one on volume of 2.20 billion shares.  

Debt fears drag Dow below 10,000

NEW YORK (CNNMoney.com) -- The Dow industrials finished below the 10,000 level Monday for the first time in three months, dragged lower by financial stocks, as investors remained concerned about Europe's debt woes and the U.S. economic recovery.

The Dow Jones industrial average (INDU) tumbled 104 points, or 1%, according to early tallies, ending at 9,908. The last time the Dow industrials finished below 10,000 was Nov. 4. The S&P 500 index (SPX) lost 9 points, or 0.9%. The Nasdaq composite (COMP) shed 15 points, or 0.7%.

The major indexes have been on the decline for four weeks in a row as the optimism that propelled a 10-month rally off 12-year lows hit last March has been replaced by cautiousness. Bets that an economic recovery was gaining momentum -- combined with trillions in fiscal and monetary stimulus -- fed the 2009 rally.

But so far in 2010, markets have been choppy and weak as investors wait for evidence that the still-germinating recovery is really taking hold, particularly amid the hard-hit labor market and housing industry.

"Investors may have priced in a tepid recovery in terms of their strategies, but they haven't priced in sovereign debt issues," said Larry Glazer, managing director at Mayflower Advisors. "That factor, plus companies reporting decent earnings but seeing no response, is having an impact right now."

In January, worries about China curbing bank lending and the U.S. White House limiting trading at big banks raised fears about tighter lending standards and the credit markets.

But stocks tumbled toward the end of last week on fears that Greece might default on its debt, which could trigger defaults in other European nations, including Portugal, Ireland, Italy and Spain. But some of the selling washed out by late Friday, suggesting the knee-jerk reaction had passed.

Helping to take the edge off the selling Monday was a rally in commodity prices and energy and metal stocks as the dollar lost some steam.

Last week, debt concerns battered the euro, propelling the dollar and dragging on dollar-traded commodities. A wish to dump riskier assets including U.S. stocks also added to the selling.

Commodities and the dollar: The U.S. dollar slipped versus the euro after rising to a more than six-month high versus the European currency last week. The dollar strengthened versus the Japanese yen.

Over the weekend, finance ministers from the Group of Seven largest industrialized nations pledged to keep providing liquidity to sustain a recovery. But the issue of Greece's potential default was not specifically addressed.

Commodity prices rallied, with COMEX gold for April delivery rising $13.40 to settle at $1,066.20 an ounce.

U.S. light crude oil for March delivery rose 70 cents to settle at $71.89 a barrel on the New York Mercantile Exchange.

On the move: A number of tech stocks gained, including Hewlett-Packard (HPQ, Fortune 500), Intel (INTC, Fortune 500), Google (GOOG, Fortune 500) and Cisco Systems (CSCO, Fortune 500).

Home Depot (HD, Fortune 500) gained after Morgan Stanley reportedly upgraded the Dow component to "overweight" from "equal-weight," saying it will benefit from a recovering housing market.

But a variety of financial shares fell, dragging on the market. Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Goldman Sachs (GS, Fortune 500) and Wells Fargo (WFC, Fortune 500) were among the big losers.

Market breadth was negative. On the New York Stock Exchange, losers topped winners by a narrow margin on volume of 770 million shares. On the Nasdaq, decliners beat advancers three to two on volume of 1.75 billion shares.

Corporate news: Former Merrill Lynch CEO John Thain will run struggling small business lender CIT Group (CIT, Fortune 500), the company said over the weekend. Thain ran Merrill until it was sold to Bank of America in September 2008, at the height of the financial crisis.

CIT emerged from bankruptcy in December. Shares gained 2% Monday morning.

Toyota Motor (TM), reeling from the recall of more than 8 million vehicles due to brake problems, told its dealers it is close to announcing a solution to the problems with the Prius hybrid Sedan.

Quarterly results: A few big corporations are due to report results this week, including Dow components Coca-Cola (KO, Fortune 500) and Walt Disney (DIS, Fortune 500) on Tuesday and Sprint Nextel (S, Fortune 500) on Wednesday.

Coke is expected to have earned 66 cents per share up from 64 cents a year ago, according to a consensus of economists surveyed by earnings tracker Thomson Reuters. Disney is expected to have earned 39 cents per share, down from 41 a year ago. Sprint Nextel is expected to have lost 19 cents per share after earning 24 cents per share a year ago.

With 320 companies, or 64% of the S&P 500, having reported results, earnings are on track to have risen 207% versus a year ago and revenues to have gained 8%. But the big jump year-over-year is partly due to easy comparisons to a tough fourth-quarter of 2008.

Financial companies in particular are driving the gains. Stripping out financials leaves earnings growth at 16% and revenue growth at 3%.

Results have largely been positive, with 74% of companies beating earnings forecasts and 70% beating revenue forecasts.

World markets: European markets ended higher, with the London FTSE gaining 0.6%. Asian markets ended lower Monday.

Bonds: Treasury prices rose, lowering the yield on the 10-year note to 3.59% from 3.61% late Friday. Treasury prices and yields move in opposite directions. 

Markets: Shaky after the slump

NEW YORK (CNNMoney.com) -- Wall Street avoided a bigger walloping late last week, with sellers finally calling it quits after a nearly 10% plunge in less than three weeks. But the week ahead could be pivotal as investors either jump back in - or retreat even further.

The week ahead brings quarterly earnings from consumer companies Walt Disney and Coca-Cola, as well as economic reports on retail sales, inventories, employment and consumer sentiment.

Debt fears in focus: Worries that Greece will default on its debt, causing a domino effect in other debt-strapped European nations, pummeled U.S. stocks last week. Investors ditched risk and embraced the U.S. dollar and government debt as they worried that a U.S. economic recovery is too fragile to withstand an upheaval across the Atlantic.

But the declines followed weakness in late January, all of which set the S&P 500, Dow and Nasdaq close to 10% below rally highs hit late last month. A 10% selloff is technically a correction, and investors managed to slow and then stop the selling before the market hit such levels late Friday.

"You've clearly got some negative sentiment and legitimate concerns," said Phil Orlando, chief equity market strategist at Federated Investors. "But that doesn't mean the market should be down 10% and continue falling. If we are able to traverse the concerns, we can return the focus to fundamentals, which are starting to improve."

He pointed to the batch of better-than-expected fourth-quarter earnings and some of the recent reports that show the economy is continuing to stabilize, although the job market remains battered.

The challenge is going from an economic recovery that is largely stimulus driven to one that is driven by fundamentals, said Robert Siewert, portfolio manager at Glenmede. "People are questioning the fundamentals."

He said that the issue going forward is "how sustainable corporate earnings and GDP are going to be when we haven't yet seen a fundamental improvement and when we still see systemic problems overseas."

Quarterly results: As the quarterly reporting period winds down, just a few market-moving names are scheduled for this week.

Dow components Coca-Cola (KO, Fortune 500) and Walt Disney (DIS, Fortune 500) are expected Tuesday, while Sprint Nextel (S, Fortune 500) is Wednesday.

Coke is expected to have earned 66 cents per share up from 64 cents a year ago. Disney is expected to have earned 39 cents per share, down from 41 a year ago. Sprint Nextel is expected to have lost 19 cents per share after earning 24 cents per share a year ago.

With 314 companies, or 63% of the S&P 500, having reported results, earnings are on track to have risen 206% versus a year ago and revenues to have gained 7%, according to the latest results from tracker Thomson Reuters.

The year-over-year jump is partly due to an abysmal fourth-quarter 2008, at the height of the financial crisis. Unsurprisingly, financial companies are leading the recovery in quarterly results.

Stripping out the financial sector, earnings are expected to have risen 16% versus a year ago, while revenue is expected to have risen 2%.

Results have largely been positive, with 74% of companies beating earnings forecasts and 71% beating revenue forecasts.

Monday: There are no market-moving reports scheduled.

Tuesday: The Commerce Department is expected to report in the morning that wholesale business inventories for December fell 0.6% after falling 1.5% in the previous month.

Wednesday: The December trade balance from the Commerce Department is due before the market open. The trade gap is expected to have narrowed to $35 billion from $36.4 billion.

The January Treasury budget, due out in the afternoon, is expected to have narrowed to $60 billion from $91.9 billion in December.

The weekly crude oil inventories report from the government is also due in the morning.

The House Financial Services Committee holds a hearing on the unwinding of Federal Reserve liquidity programs that were put in place to help temper the blow of the recession. Fed Chairman Ben Bernanke is due to testify.

In the afternoon, the House Oversight Committee holds a hearing on Toyota (TM). The company has recalled more than 8 million vehicles due to safety issues with its gas pedal.

Thursday: The January retail sales report is due shortly before the start of trading. Sales are expected to have risen 0.4% after falling 0.3% in December. Sales excluding autos are expected to have risen 0.4% after falling 0.2% in December.

The government's business inventories report for December, due out after the start of trading, is expected to have risen 0.4% after rising 0.4% in the previous month.

The weekly jobless claims report from the Labor Department is also due in the morning.

Friday: The University of Michigan's consumer sentiment index for February is expected to have risen to 74.8 from 74.4, according to forecasts. 

Stocks plunge on job and debt woes

NEW YORK (CNNMoney.com) -- Stocks tumbled Thursday, with the Dow and S&P 500 near 3-month lows, amid fears of sovereign debt woes in Europe, and a rise in weekly jobless claims ahead of Friday's big monthly employment report.

The Dow Jones industrial average (INDU) tumbled 270 points, or 2.6%, closing at 10,002.26 according to early tallies. The blue-chip average fell as low as 9998.03 right before the close. The last time it fell below 10,000 was in early November.

The S&P 500 index (SPX) sank 34 points, or 3.1%. Both indexes closed at their lowest points since Nov. 4.

The Nasdaq composite (COMP) fell 65 points, or 3%, and closed at its lowest point point since Nov. 6.

Debt woes propelled the dollar to a more than seven-month high versus the euro, which in turn pummeled dollar-traded commodities such as oil and gold. Treasury prices spiked, lowering yields, in a classic flight-to-safety move.

Meanwhile, the VIX (VIX), Wall Street's fear gauge, spiked 18%, suggesting investor nervousness was increasing.

"A surprise rise in weekly jobless claims ahead of tomorrow's non-farm payrolls report in combination with the sovereign debt issue has got people a bit spooked today," said Mikel Keifer, vice president at Jurika Mills & Keifer.

Keifer said concerns about Greece's debt problems have been in play for a while, but now Spain, Portugal and Ireland are joining the fray.

Reports of labor unrest and political problems in the troubled nations are adding to the nervousness. "The worries are coming more to the forefront as market participants wonder if these countries will be able to refinance the debt," Keifer said.

The stronger dollar sent oil and gold prices lower, and stocks such as Chevron (CVX, Fortune 500) and Exxon Mobil (XOM, Fortune 500) sliding. With energy one of the biggest sectors in the S&P 500, the selloff in the sector dragged on the broader market.

Weaker-than-expected labor market reports on both Wednesday and Thursday also played a role, creating jitters ahead of Friday's January jobs report.

"The market is turning its attention to the jobs data and it doesn't like what it's seeing," said Matt King, chief investment officer at Bell Investment Advisors.

Rally loses steam: Stocks rallied in the last 9 months of 2009 as investors dug back in after a brutal start to the year. The S&P 500 gained 65% between the 12-year lows hit on March 9 and year-end.

That advance continued up until around Jan. 19 of this year. But between that Jan. 19 high and the end of January, the S&P 500 lost just short of 7%.

"The market is in a pessimistic mood today, but this is also an extension of the correction we saw in late January," King said. "We saw a 7% decline, but we probably need to see double-digits (in percentage) before the selloff is over."

Jobs: The number of Americans filing new claims for unemployment rose to 480,000 last week from a revised 472,000 the previous week, the Labor Department reported. Economists surveyed by Briefing.com expected 455,000 new claims.

Continuing claims, the number of Americans receiving benefits for a week or more, rose to 4,602,000 from 4,600,000 the previous week. Economists expected 4,581,000.

The report was the lead-in to Friday's big January jobs report from the government. Employers are expected to have added 15,000 jobs to their payrolls last month after cutting 85,000 in the previous month. The unemployment rate, generated by a separate survey, is expected to hold steady at 10%.

But the annual revision of U.S. payrolls is expected to show job losses during the recession were a lot more severe than previously thought. The Bureau of Labor Statistics is expected to say that 824,000 more jobs were lost than previously thought during the April 2008 to May 2009 period.

Factory orders: December factory orders rose 1% versus forecasts for a rise of 0.5%. Orders rose 1% in the previous month.

Quarterly results: After the close of trading Wednesday, tech leader Cisco Systems (CSCO, Fortune 500) reported better-than-expected quarterly sales and earnings.

Toyota Motor (TM) reported improved earnings in its most recent quarter and also lifted its estimates for the fiscal year ending in March. But the results did not include the impact of the huge recall of millions of vehicles due to gas pedal problems. Toyota estimates that the global recall could cost it as much as $2 billion.

On Thursday, the government announced a formal probe into brake problems in the popular Prius hybrid. (Feds probing Prius brakes)

World markets: In overseas trading, Asian markets tumbled and European markets ended lower.

Commodities and the dollar: The dollar gained versus the euro on worries about sovereign debt in Greece, Spain and elsewhere in Europe. The dollar fell versus the Japanese yen.

The dollar's strength against the euro dragged on oil and gold prices and individual stocks.

COMEX gold for April delivery fell $49 to settle at $1,062.40 an ounce.

U.S. light crude oil for March delivery fell $3.84 to settle at $73.14 a barrel on the New York Mercantile Exchange.

Bonds: Treasury prices rallied, lowering the yield on the 10-year note to 3.61% from 3.70% late Wednesday. Treasury prices and yields move in opposite directions.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by over nine to one on volume of 1.01 billion shares. On the Nasdaq, decliners topped advancers by more than five to one on volume of 2.27 billion shares. 

Stocks struggle after rally

NEW YORK (CNNMoney.com) -- Stocks slipped Wednesday, falling after a two-session rally, amid weakness in banks, concerns about Toyota and questions about the outlook for the labor market.

Also, a rally in the U.S. dollar dragged on dollar-traded commodity stocks.

The Dow Jones industrial average (INDU) lost 26 points, or 0.3%, according to early tallies. The S&P 500 index (SPX) fell 6 points, or 0.6%. The Nasdaq composite (COMP) was little changed.

After the close, Cisco Systems (CSCO, Fortune 500) and chipmaker Novellus (NVLS) reported better-than-expected quarterly sales and earnings.

Stocks started the first two days of February with a rally, following a January slump that was Wall Street's worst month since February 2009.

Worries about China's bank lending curbs and the Obama administration's plans to restrict bank trading led the January selloff. But investors may also have been pleading exhaustion after a big rally in 2009, in which the S&P 500 gained 23.4%.

"The tone of the market is not as good right now as it was last year," said Will Hepburn, chief investment officer at Hepburn Capital Management. He said that asset deterioration and worries about the ballooning deficit are overshadowing improved profit reports.

Meanwhile, investors are looking for more indications that a recovery is taking hold, after pushing stocks higher last year in anticipation of such a rebound.

Among stock movers, financial shares slipped, with the KBW Bank (BKX) sector index falling 2%. Wells Fargo lost 2% and a number of the regional banks declined as well, including Fifth Third Bancorp (FITB, Fortune 500), Regions Financial (RF, Fortune 500) and SunTrust.

Jobs market: Investors considered a pair of employment reports that painted a mixed picture ahead of Friday's big January jobs reading from the government.

Payroll services firm ADP reported that employers in the private sector cut 22,000 jobs in January following a revised loss of 61,000 jobs in December. Economists surveyed by Briefing.com had forecast a loss of 30,000.

Meanwhile, outplacement firm Challenger, Gray & Christmas reported that announced layoffs in January rose to a five-month high of 71,482 from 45,094 in December.

In other economic news, the Institute for Supply Management's services sector index rose to 50.5 in January from 49.8 in the previous month. Economists had thought it would rise to 51.

Quarterly profits: Dow component Pfizer (PFE, Fortune 500) reported higher quarterly earnings that missed estimates, on higher revenue that topped estimates. The drugmaker, which finished its $67 billion purchase of fellow drugmaker Wyeth in October, also forecast 2010 earnings that are short of analysts' estimates.

Looking out further, Pfizer forecast 2011 revenue that is in line with estimates and 2012 revenue that is short of its forecast from a year ago. Shares fell 3%.

Time Warner (TWX, Fortune 500) reported sales and earnings that rose from a year ago, in its first quarterly report without AOL in a decade. The media company, which is the parent of CNNMoney.com, benefited from strength in its TV and movie divisions, as well as some cost cutting at its Time Inc. brand. Time Warner also raised its dividend.

Shares fell 2%.

AOL (AOL) -- in its first quarter in a decade as a stand-alone Internet company -- said it swung to a profit of $1.4 billion from a loss of $1.9 billion a year ago. Shares were little changed.

News Corp. (NWS, Fortune 500) reported quarterly earnings and revenue after the close Tuesday that jumped from a year earlier and topped expectations. Shares gained 6% Wednesday.

Among other movers, McDonald's (MCD, Fortune 500) shares rose 2% after Goldman Sachs reportedly added it to its Americas conviction buy list, saying it expects earnings growth at the company in 2010.

Toyota: Shares of Toyota (TM) slumped 6% after Department of Transportation Secretary Ray LaHood told a Congressional panel that owners of recalled Toyotas should take them to a dealer for repairs.

On Monday, the automaker said it will fix millions of gas pedals in recalled vehicles, eliminating a problem that caused the pedals to stick, which prompted the recall of 2.3 million vehicles in the United States. Toyota also recalled over five million vehicles due to risks that floor mats could become stuck on floor pedals.

The company is also now facing numerous complaints about brake problems in its 2010 Prius.

World markets: In overseas trading, Asian markets ended higher, gaining for a third straight session after last week's selloff. European markets fell in late trading.

Commodities and the dollar: The dollar gained versus the euro and the yen.

COMEX gold for April delivery fell $6 to $1,111.40 an ounce.

U.S. light crude oil for March delivery fell 25 cents to $76.98 a barrel on the New York Mercantile Exchange.

Bonds: Treasury prices tumbled, raising the yield on the 10-year note to 3.69% from 3.64% late Monday. Treasury prices and yields move in opposite directions.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by almost three to two on volume of 700 million shares. On the Nasdaq, decliners topped advancers three to two on volume of 1.76 billion shares. 

Dow: Triple-digit gain for 2nd day

NEW YORK (CNNMoney.com) -- Stocks rallied Tuesday, with the Dow Jones industrials posting their second straight triple-digit gain, as investors welcomed better-than-expected corporate results, signs of stability in the housing sector and solid auto sales.

The Dow (INDU) rose 111 points, or 1.1%. The S&P 500 index (SPX) gained 14 points, or 1.3%. The Nasdaq composite (COMP) rallied 18 points, or 0.9%.

Treasury prices rose, lowering the corresponding yields, while a weaker dollar lifted commodity stocks.

Stocks are rising this week as investors step back in after a two-week selloff that saw the S&P 500 lose almost 7%. Worries about President Obama's plan to limit trading at big banks, China's lending curbs and global debt worries all led to the selloff.

While the concerns haven't disappeared, investors nonetheless used the selloff as an opportunity to dip back into stocks at a lower level.

"We're seeing a little bounce here, but I think we could still see more selling in the short term," said Dave Hinnenkamp, CEO at KDV Wealth Management.

He said fourth-quarter earnings have been strong, but that was already anticipated by investors and is having little impact on the broad market.

"People are focusing on the outlook for banks, China and the deficit, and not really paying attention to the earnings," he said.

Gains were broad based Tuesday, with 28 of 30 Dow stocks rising, including Alcoa (AA, Fortune 500), which was upgraded by Citigroup.

Auto sales: Major automakers, including Ford Motor (F, Fortune 500), General Motors and Nissan all reported improved January sales. However, Toyota (TM), which earlier this month recalled millions of cars due to a faulty gas pedal, saw a bigger-than-expected decline in January sales.

Corporate results: UPS (UPS, Fortune 500) reported lower quarterly revenue and earnings versus a year earlier, but the results topped analysts' expectations. The company also issued a 2010 earnings forecast of $2.70 to $3.05 per share, up from 2009. Analysts are expecting $2.81 per share. Shares were little changed in the early going.

Homebuilder D.R. Horton (DHI, Fortune 500) reported quarterly earnings of 56 cents per share in its fiscal first quarter, surprising analysts who thought it would report a loss. The company benefited from a big tax gain. The company also said new orders and completed sales rose significantly in the quarter. Shares gained 10% in active New York Stock Exchange trading.

Emerson Electric (EMR, Fortune 500), a maker of automation systems for a broad range of companies, reported weaker quarterly sales and earnings that surged past forecasts. Shares gained 8%.

With around 48% of the S&P 500 having reported results, earnings are currently on track to have risen 204% from the prior year, according to the latest estimates from Thomson Reuters. But the improvement is mostly because of cost-cutting and easy comparisons to a wretched fourth quarter of 2008.

The financial sector is expected to lead the advance, rising 73% versus a year earlier. Strip out financial sector results and earnings are only expected to rise 15%.

Revenue is set to rise about 8% year over year. Excluding financial firms, revenue is expected to rise about 3%.

Housing: The National Association of Realtors' pending home sales index rose 1%, in line with expectations. The index fell 16.4% in the previous month.

Washington: The Senate Budget Committee held a hearing on the 2011 budget. In his testimony, Treasury Secretary Timothy Geithner said a bipartisan effort is needed to trim a deficit the Obama White House mostly inherited from the Bush administration. He said the economy is recovering, but it will take time for the private sector to create new jobs.

Volcker: Testifying at a Senate Banking Committee meeting, White House economic adviser Paul Volcker sought to expand on Obama's call for greater limitations on bank trading.

Last week, Obama called for limiting commercial banks ability to make high-risk trades and stopping them from owning or investing in hedge funds. The change is seen as a throwback to a Depression-era law that was essentially tossed out a decade ago.

The former Federal Reserve Chairman said limiting banks from engaging in certain high-risk trades would limit the number of institutions that are deemed to be "too big to fail.

World markets: In overseas trading, Asian markets ended higher, gaining for a second week in a row after last week's selloff. European markets also ended higher.

Commodities and the dollar: The dollar fell versus the euro and the yen.

COMEX gold for April delivery rose $13.10 to settle at $1,117.40 an ounce.

U.S. light crude oil for March delivery added $2.80 to settle at $77.23 a barrel on the New York Mercantile Exchange.

Bonds: Treasury prices rose, lowering the yield on the 10-year note to 3.64% from 3.65% late Monday. Treasury prices and yields move in opposite directions.  

Stocks bounce after battering

NEW YORK (CNNMoney.com) -- Stocks surged Monday, starting off a new month with strong gains, as investors welcomed better-than-expected reports on personal income, manufacturing and Exxon Mobil's profit.

The Dow Jones industrial average (INDU) rose 118 points, or 1.2%. The S&P 500 index (SPX) gained 15 points, or 1.4%. The Nasdaq composite (COMP) added 24 points, or 1.1%.

Wall Street ended one of the worst months in nearly a year Friday, with the Dow, S&P 500 and Nasdaq all closing at two-month lows. President Obama's plan to restrict trading at big banks, China's bank lending curbs and global debt worries all rattled investors.

But investors used the selloff as an opportunity to get back into stocks Monday, continuing last year's trend.

"People getting in at these levels are assuming that this is another of the mini-corrections we've seen over the last 11 months, but I would be skeptical," said Paul Brigandi, vice president of trading at Direxion Funds.

He said that with the market up more than 50% from the lows of last March, a correction of 10% to 15% was not out of the question. Between the high on Jan. 19 and Friday's lows, the S&P 500 lost just under 7%.

Looking forward, "I think you could see a deeper selloff," Brigandi said.

Gains were broad based, with 28 of 30 Dow components rising, led by Boeing (BA, Fortune 500), Caterpillar (CAT, Fortune 500), Chevron (CVX, Fortune 500), Hewlett-Packard (HPQ, Fortune 500), IBM (IBM, Fortune 500), McDonald's (MCD, Fortune 500) and Exxon Mobil (XOM, Fortune 500).

Quarterly results: Exxon Mobil reported a profit of $6.05 billion or $1.27 per share, down about 18% from the fourth quarter of 2008 when oil prices were lower and fuel demand was higher. Nonetheless, results topped the forecasts of analysts surveyed by Thomson Reuters.

With around 45% of the S&P 500 having reported results, earnings are currently on track to have risen 206% from a year ago, according to the latest from Thomson Reuters. But the rise is mostly due to cost-cutting and easy comparisons to an abysmal fourth quarter of 2008.

The financial sector in particular is set to bounce back. Strip out financial sector results and earnings are only expected to rise 15%.

Revenue is set to rise about 7% year over year. Without financials, revenue is expected to rise about 2%.

Budget: President Obama unveiled a $3.8 trillion budget for 2011 on Monday that looks to both support the still-fragile economy and temper the nation's growing deficit.

Economy: Personal income rose 0.4% in December, the Commerce Department reported, surprising economists who were looking for an increase of 0.3% on average, according to Briefing.com estimates. Income rose 0.5% in the previous month.

Personal spending rose 0.2% after rising 0.3% in the previous month. Economists thought it would rise 0.3% in December.

The Institute for Supply Management's manufacturing index rose to 58.4 in January from 54.9 in December. Economists thought it would rise to 55.5.

Construction spending fell 1.2% in December, worse than the drop of 0.5% economists were expecting. Spending fell 1.2% in November.

Toyota: On Monday, the company announced plans to fix millions of gas pedals in recalled vehicles and said it has already shipped out parts to dealers.

The fix eliminates the problem that caused pedals to stick, which prompted the recall of 2.3 million vehicles in the United States. Toyota (TM) shares gained 3.8%.

World markets: In overseas trading, Asian markets ended higher, rebounding after last week's selloff. European markets gained, with the London FTSE up 1.1%, the German DAX up 0.8% and the French CAC 40 up 0.6%.

Commodities and the dollar: The dollar fell versus the euro and gained versus the yen.

COMEX gold for February delivery rose $21.30 to settle at $1,104.30 an ounce. Gold closed at an all-time high of $1,218.30 an ounce last month.

U.S. light crude oil for February delivery added $1.54 to settle at $74.53 a barrel on the New York Mercantile Exchange.

Bonds: Treasury prices fell, raising the yield on the 10-year note to 3.65% from 3.58% late Friday. Treasury prices and yields move in opposite directions.

Market breadth was positive. On the New York Stock Exchange, winners beat losers nearly four to one on volume of 1.04 billion shares. On the Nasdaq, advancers beat decliners eight to five on volume of 2.23 billion shares. 

Stocks: New month, same worries