Updated from 4:26 p.m. EST
Stocks in New York locked in gains Tuesday as investors made eyes at tech and took in economic commentary from President-elect Obama as well as the
Stocks, particularly in the tech sector, held up through a mass of mostly unpleasant economic indicators. The
Dow Jones Industrial Average
rose 62.21 points, or 0.7%, to 9015.10, and the
added 7.25 points, or 0.8%, to 934.70. The
led the charge, climbing 24.35 points, or 1.5%, to 1652.38.
The Federal Open Market Committee released
from its historic
, during which the central bank cut its key benchmark interest rate to a range of zero to 0.25%.
"In the forecast prepared for the meeting, the staff revised down sharply its outlook for economic activity in 2009 but continued to project a moderate recovery in 2010," according to the minutes.
Real GDP was projected to decline for 2009 as a whole and to rise at a pace slightly above the rate of potential growth in 2010. The unemployment rate was deemed likely to rise significantly into 2010, to a level higher than projected at the time of the FOMC's October meeting. Core inflation was projected to slow considerably in 2009 and edge down further in 2010.
Barack Obama said Tuesday that the federal deficit will likely close in on $1 trillion in 2009 and stay at unprecedented levels for years, warning the government must embrace budget reform. The president elect also said his $800 billion stimulus package will ban the pork-barrel projects that are often inserted into legislation, and will be evaluated by an oversight board.
Meanwhile, the National Association of Realtors said Tuesday that the
pending home sales index
declined in the face of job losses and an eroding economy after holding fairly stable for a year. The index, based on contracts signed in November, fell 4% to 82.3 from 85.7 in October, and is 5.3% below a year prior. It's the lowest reading since the series began in 2001, according to the NAR.
"December's housing market activity could be comparably lower due to ongoing problems in the economy, so a real estate-focused stimulus plan is urgently needed," said Lawrence Yun, NAR chief economist.
The Commerce Department reported that November
fell 4.6%, double the expected decline.
One bright spot in Tuesday's data, the
Institute for Supply Management
said its December index of non-manufacturing activity, rose to 40.6 from 37.3, four points higher than expected.
"This is a mildly pleasant surprise but it is likely nothing more than noise; the trend in the index is still downwards, following the meltdown in retail sales," wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics.
Bank of America
made water-cooler talk on two fronts Tuesday. Some of
high profile talent is slipping through BofA's fingers days after it closed the acquisition.
, who previously led Merrill's retail brokerage has stepped down. The brokerage is considered a primary reason for the acquisition.
Also, CEO and chairman Kenneth Lewis in an internal memo said he expects final results for the year to come in below expectations and suggested that he and his top staff not reap bonuses for 2008, according to a report in
The Wall Street Journal
. Shares added 2.2% to $14.28.
U.S. automakers aired 30%-plus declines in December sales on Monday, but the problems are global.
, which itself revealed a 37% decline in U.S. sales, is feeling the strain at home too. On Tuesday, the company said it would suspend production at all 12 of its plants in Japan for 11 days to adjust for the decrease in global demand.
News flow out of
in San Francisco was light on Tuesday and
traded down 1.7% to $93.02, but investors had eyes for other tech stocks.
Research In Motion
added 7.7% to$ 46.61,
gained 4.2% to $11.05, and
tacked on 8.2% to $39.31.
Tech stocks popped up in
as well. Oppenheimer upgraded Apple to outperform and raised its price target a day after CEO
wrote a "Dear Apple Community" letter on his health, reassuring investors he'd stay at the helm.
Also, Merriman upgraded
to neutral from sell, while Bernstein, which has an outperform rating, cut its estimates for the company. Google added 1.8% to $334.06.
In commodities, gold added $8.20 to settle at $866 an ounce, while oil shed 23 cents to settle at $48.58 a barrel. Compliance with OPEC supply cuts and the Israeli offensive in Gaza have played into headlines about recent rising oil prices. But more so is the intensifying gas dispute between Russia and Ukraine. According
, flows of Russian gas through Ukraine to Bulgaria, Turkey, Macedonia, Greece and Croatia have come to a halt. The European Union, which relies heavily on Russia for its gas, is urging resolution.
Meanwhile, longer-dated Treasuries reversed after a multiday decline. The 10-year note was rising 8/32 to yield 2.5%, and the 30-year note was up 21/32, yielding 3%. The dollar reversed to be weaker against the euro and yen, and stronger against the pound.
Overseas, the FTSE in London and the DAX in Frankfurt edged higher Tuesday. In Asia, Japan's Nikkei ended higher and Hong Kong's Hang Seng edged down slightly.
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