Stocks finished higher Monday despite worries about a trade war with China. News of tariff actions by the U.S. on Chinese tires, which has prompted a WTO counter complaint by the Chinese and an anti-dumping investigation on U.S. products (chicken and autos), sent stocks lower in the morning, but gains in industrial and utilities stocks pushed the major averages higher in the afternoon.
Meanwhile, the anniversary of the collapse of Lehman Brothers revived momentum behind regulatory reform in the financial sector, says Action Economics. President Obama gave a speech today about financial reform on Wall Street. He said there is still a need for government help to stabilize the financial system, though that need is waning. While bailout measures have earned taxpayers 17% on their investment, some in the financial industry are ignoring the lessons of the Lehman collapse, he said. Obama says he wants to work with the financial industry to ensure the regulation does not stifle innovation, while backing a consumer protection agency.
The president sees the G20 as an important link in coordinating economic policies, which the U.S. will participate in on a global scale. He is still aiming for regulatory reform by yearend, and believes exec bonuses should be put to a shareholder vote from 2009.
On Monday, the 30-stock Dow Jones industrial average rose 21.39 points, or 0.22%, to 9,626.80. The broad Standard & Poor's 500-stock index gained 6.61 points, or 0.63%, to 1,049.34. The tech-heavy Nasdaq composite index added 10.88 points, or 0.52%, to 2,091.78.
The U.S. dollar was flirting with last week's one-year low, as EUR-USD climbed to new trend highs near 1.4650, says Action Economics. Gold prices moved lower, to $999.90 per ounce, after the yellow metal hit near 18-month intraday high of $1,012.40 per ounce on Friday.
In the energy markets, October natural gas futures jumped 12.5% to $3.33 per contract. Natual gas have gained over 30% since hitting a low of $2.51 per contract on Sept. 3. But crude Oil prices were lower at $68.89 per barrel.
Treasury yields rose, with the yield on the 10-year note up at 3.406%.
Coming Tuesday are reports on producer price index, retail sales, the Empire State index and business inventories.
In M&A news Monday, utility AES Corp. (AES) rose after The Wall Street Journal reported that China's investment arm is interested in buying a stake in the company.
Sprint Nextel (S) rallied on reports that Deutsche Telekom may be interested in making a bid for the company. Cadburry (CBY) put out a statement saying that an offer from Kraft (KFT) fundamentally fails to reflect Cadburry's current value.
NEC Corp., Casio Computer, and Hitachi (HIT) announced an agreement to integrate their mobile terminal businesses in April 2010 through the establishment of a joint venture company.
In other company news, Tenet Healthcare (THC) raised its earnings outlook for 2009; it sees EPS of $0.04-$0.08, vs. $0.05 consensus estimate and prior guidance of a loss of $0.08-$0.01.
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