A relatively large dose of good and bad news contributed to a fluctuating stock market today, as the Dow Jones gained 38.47 points (.48%) and the S&P 500 rose 4.62 points (.56%).
One note of positive good news came from the announced megadeal between pharmaceutical giants Pfizer Inc and Wyeth. Pfizer will acquire Wyeth for $68 billion, in a move that will make the world’s biggest pharmaceuticals maker even bigger and more diversified. This merger between the two companies was positive news for the markets, as it showed that companies are still willing to partake in deals and partnerships, even amidst a recession.
There was also a better-than-expected data report from the National Association of Realtors. According to the report, existing-home sales increased to 4.74 million in December, exceeding expectations that predicted a fall in home sales to 4.4 million. This report shows that people are beginning to buy homes again, as for the first time in a while, more houses were bought than expected.
But, negative news about the job market and corporate earnings kept the market’s gains in check. Both Caterpillar (CAT) and Home Depot (HD) announced big job cuts. CAT announced the job cuts after it reported that its 4th-quarter earnings fell 32%. American Express (AXP) also announced today that its 4th-quarter profits fell 79%, as cardmembers just aren’t spending as much money in this economy. Other companies that reported massive job cuts were Microsoft (MSFT), Intel (INTC), and Spring Nextel (S). Economists also predicted that at least 2 million more jobs will be lost this year, and that the unemployment rate could hit 10% or higher towards the end of 2009.
While the stock market held strong amid a few threads of good news about home sales and a major acquisition, the bad news about unemployment and corporate earnings continues to linger in the back of investors’ minds. With more earning reports expected to be announced throughout this week, I think it is going to be an ugly next few days for the market.
Until tomorrow,
Niki Pezeshki
College Trillionaire
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Niki - Salient Commentary. You da man.
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