MW: Stocks mixed on fresh Fed moves to revive lending
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks mostly advanced on Tuesday, extending the market's biggest two-day jump in two decades, after the government said it's readying a program to help resurrect dormant consumer loans to help revive the economy.
"If the Fed and the Treasury are backing the U.S. financial system, who is backing the U.S.?" asked Tony Crescenzi, bond strategist at Miller Tabak.
"For now, investors are putting this question aside and believing that such doomsday scenarios are a low probability."
Paring an initial triple-digit rise, the Dow Jones Industrial Average was more recently up 97.56 points to 8,540.95, with 19 of its 30 components posting early gains.
The blue-chip advance was fronted by J.P. Morgan Chase & Co. , shares of which moved up 8.7%.
General Motors Corp.proved the Dow's greatest laggard, with shares of the automaker sliding 7.5%.
The S&P 500 added 9.19 points to 861, as telecommunication services, financials and consumer discretionary led early sector gains that encompassed all but one of the S&P's 10 industry groups.
Information technology was the sole declining sector, weighed down by the likes of Juniper Networks Inc. , off 5.4%, and Electronic Arts Inc. , down 4.9%.
It was a similar story for the technology-heavy Nasdaq Composite, which fell 13.62 points to stand at 1,458.40.
Volume on the New York Stock Exchange hit 334 million, and advancers outran declining issues nearly 2 to 1. On the Nasdaq, 197 million shares traded, and advancers topped decliners roughly 6 to 5.
Pay back
In what investors took as a pleasant surprise, the Federal Reserve said it would lend up to $200 billion to back the issuance of debt including student, auto and credit-card loans, as well as those backed by the Small Business Administration. Read more.
The government's latest move to stimulate leding overshadowed data that showed the U.S. economy contracting at a 0.5% annual rate in the third quarter, slightly faster than initially estimated. See Economic Report.
The GDP data helped spark a rally in Treasury prices, pushing yields lower. Read Bond Report.
A separate report showed home prices in 20 major cities falling by 1.8% in September from the month before, and by a record 17.4% from the prior year. Read detailed story.
In energy trading, crude-oil futures fell early as concerns over a sharp slowdown in energy demand weighed on sentiment. Crude for January delivery fell $1.80 to $52.70 a barrel. Read Futures Movers.
Falling gas prices bolstered consumer sentiment in November, according to the Conference Board's latest monthly survey, which showed confidence climbed from a record low in October. See Economic Report.
Meat-packer Hormel Foods Corp.reported solid fourth-quarter sales growth, but it also said losses on an investment trust dragged profits down. See more.
Home builder D.R. Horton Inc. said its fourth-quarter loss swelled to $800 million, mostly due to unsold inventory and big losses on land disposal. Read full story.
Overseas, most Asian markets gained. See Asia Markets.
Stocks in Europe reversed off early lows to edge higher. Read Europe Markets.
On Monday, U.S. stocks climbed for a second session straight as the government backed more than $300 billion of Citigroup Inc. assets and President-elect Barack Obama formally unveiled his economic team.
