Stocks Finish Modestly Higher

(page 2 of 2)

Market players were treated to some diverging views on the health of the economy Monday. Goldman Sachs economist Jan Hatzius said in a note Monday that “There is no longer much doubt in my mind that the US economy is now in recession.”

U.S. Treasury Secretary Henry Paulson, a former Goldman hand, had a different view. Paulson told the G7 weekend meeting in Tokyo he believes the U.S. will continue to post economic growth and "if you are growing, you are not in a recession."

Traders continue to look for more evidence that the economy is slowing, but there was little new data on Monday. The market will have to wait until Wednesday to get its first big releases of the week: January retail sales and business inventory figures for December. Initial jobless claims and an estimate of the December trade gap arrive on Thursday, while data on import prices and industrial production will be closely watched on Friday.

March WTI crude oil futures rose $1.82 to $93.59 per barrel Monday following a report

that Valero shut its Delaware refinery because of a power failure caused by high winds. Valero is in the process of restarting the units. Some buying was sparked by reports Venezuelan President Hugo Chavez threatened to halt oil exports to the U.S. after Exxon Mobil (XOM) took action to freeze $12 billion of oil assets.

Among other stocks making headlines in Monday's session, Hasbro (HAS) saw strong sales in the fourth quarter, posting earnings of 84 cents per share, vs. 62 cents a year ago, as revenue rose 16%.

Google (GOOG) plans to partner with Chinese online music provider Top100.cn to offer free music downloads.

Loews Corp.-Carolina Group (CG) reported earnings of $1.18 per share, vs. $1.26 per share, as higher expenses offset a 2.1% rise in sales for the tobacco firm.

Darden Restaurants (DRI) said it sees third-quarter EPS from continuing operations of 78-80 cents (including costs and adjustments). It also said that through Feb. 10, Red Lobster, Olive Garden and LongHorn Steakhouse's combined U.S. same-restaurant sales for the thirds quarter were up 1.2% over the comparable prior-year period.

E*Trade Financial Corp. (ETFC) expects to generate $80 million by selling the assets of its RAA Wealth Management business to PHH Investments.

MBIA (MBI) is the subject of an SEC filing showing Warburg Pincus LLC owns a 16.5% stake in the troubled bond insurer.

European stocks ended lower Monday as the European Central Bank indicated it is not in a hurry to cut interest rates. In London, the FTSE 100 index was off 1.32% to 5,707.70. In Paris, the CAC 40 index fell 0.57% to 4,682.70. Germany's DAX index shed 0.35% to 6,743.54.

In Hong Kong, the Hang Seng index dropped 3.64% on Monday, to 22,616.11. The Japanese market was closed.

Treasury market

Treasuries traded modestly higher in Monday afternoon, reflecting renewed concerns over the health of the financial sector. These worries stemmed from news of losses in AIG's credit-default swap portfolio and media reports about speculation of an executive shakeup at the insurer. The 10-year note rose 07/32 in price to 98-01/32 for a yield of 3.62%, while the 30-year bond climbed 10/32 to 99-16/32 for a yield of 4.40%.