U.S. stocks advanced for a second day after the government gave further support to Bank of America Corp. in an effort to prevent the financial crisis from deepening and Citigroup Inc. said it will split in two. Bank of America rallied as much as 12 percent, snapping a seven-day losing streak, after getting a $138 billion government lifeline. Citigroup added as much as 17 percent after the bank said it will form two new businesses and keep the units it wants separate from other “non-core” assets. Intel Corp. gained 4.4 percent on its prediction that profitability may rebound after the first quarter. The Standard & Poor’s 500 Index added 1.5 percent to 856.34 at 10:07 a.m. in New York, continuing its rebound from the worst ever start to a year. The Dow Jones Industrial Average gained 104.42 points, or 1.3 percent, to 8,316.91. The Russell 2000 Index rose 1 percent. “With Citigroup, fear of the unknown has been hanging over the stock,” Peter Sorrentino, who helps manage $16 billion including Citigroup shares at Huntington Asset Advisors Inc. in Cincinnati, told Bloomberg Television. “A lot of the unknowns are quickly being resolved there.” The advance today pared the S&P 500’s 2009 decline to 5 percent. At this time last year, the index had slumped 6 percent and was on its way to a 38 percent slide for 2008 in the market’s worst yearly plunge since 1937. Bank of America Bailout Bank of America gained as much as $1 to $9.32 before paring its advance. The largest U.S. bank by assets posted its first loss since 1991 and cut its quarterly dividend to 1 cent a share from 32 cents after the government agreed to invest $20 billion more in the lender and guarantee $118 billion of assets to help it absorb Merrill Lynch & Co. Bank of America’s fourth-quarter loss of $1.79 billion, or 48 cents a share, compared with net income of $268 million, or 5 cents, a year earlier. Citigroup analyst Keith Horowitz estimated on Jan. 11 that Bank of America would post a $3.6 billion loss. Citigroup advanced 39 cents to $4.22. The bank posted an $8.29 billion fourth-quarter loss, completing its worst year, as the credit crisis eroded mortgage-bond prices and customers missed more loan payments. The company posted a net loss of $1.72 a share compared with a loss of $1.99 per share a year earlier. The results included a $3.9 billion gain from the sale of a German consumer bank. Analysts, excluding the gain, estimated the company would report a loss of $1.08 a share, according to a survey by Bloomberg. Citi’s Sell-off Citigroup, which earlier this week said it plans to sell control of the Smith Barney brokerage, tagged for disposal the CitiFinancial consumer-lending business and Primerica Financial Services life-insurance unit, building blocks of the financial colossus assembled by former CEO Sanford “Sandy” Weill. Charles Schwab Corp. added 0.2 percent to $14.92. The largest independent brokerage by client assets said fourth- quarter profit was little changed as costs declined faster than asset-management fees. Net income was 27 cents a share, topping the 26-cent average estimate of analysts surveyed by Bloomberg. Intel increased 3.4 percent to $13.74. The world’s biggest maker of semiconductors said profitability may rebound after the first quarter, when customers finish working through excess supplies. The company said revenue this quarter may be about $7 billion, without providing an official forecast. Stocks yesterday ended a whipsaw session higher after expectations grew that Bank of America would get more federal aid and Citigroup denied speculation the government planned to take over the bank. ‘January Barometer’ Falling share prices so far this year suggest the so-called January barometer will signal a loss for 2009. The indicator was developed by Yale Hirsch, chairman and founder of the Stock Traders’ Almanac, and built on the theory that the S&P 500’s first-month performance sets its course for the year. Since 1950, the barometer has been at least 80 percent accurate. One of the exceptions occurred in 1978, when the index rebounded from a January drop of 6.2 percent to close 1.1 percent higher. The S&P 500 reached an 11-year low of 752.44 and the Dow slid to the lowest since 2003 on Nov. 20. Stocks tumbled as more than $1 trillion in bank losses froze lending and spurred a global recession. A decline in U.S. stock indexes below the 2008 lows from November may trigger a rout that pushes benchmark averages to levels not seen since the mid-1990s, according to technical analysts Ralph Acampora and John Murphy. Should the Dow fall below the 7,552.29 it touched on Nov. 20, it might tumble to 6,000, according to Acampora, who retired from Knight Capital Group Inc. in October 2007 after four decades on Wall Street. Cost of Living The cost of living fell in December, capping the smallest annual gain in a half century, as the recession deepened. Consumer prices fell 0.7 percent in December after dropping 1.7 percent the prior month. Excluding food and energy, costs were unchanged. Americans paid 0.1 percent more for goods and services in 2008, the least since 1954, the Labor Department said. Estee Lauder Cos. dropped 15 percent, the steepest decline in the S&P 500, to $24.81. The maker of Clinique and Bobbi Brown cosmetics cut its sales and profit forecast for fiscal 2009 ending June 30, citing “deteriorated global economic conditions.”

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