US stocks pare losses upon mortgage deal

January 9th, 2009 - 7:52 am ICT by IANS  

Barack ObamaNew York, Jan 9 (Xinhua) US stocks rebounded from the day’s lows and ended mostly higher Thursday after a deal to prevent more foreclosures offset concerns over jobless data and sales slump.The news that US Democratic lawmakers reached an agreement with Citigroup Inc. on a plan to prevent more mortgage foreclosures lifted the market in the late afternoon trading.

US President-elect Barack Obama delivered a main speech on US economy Thursday morning, urging the Congress to pass a massive stimulus plan in a few weeks.

Investors were worried about more severe economic woes as big retailers such as Wal-Mart, Macy’s and Limited Brands cut earnings forecasts after recession-hit consumers pared their holiday spending.

Wal-Mart, the nation’s largest retailer, said sales in December at stores open for at least a year rose by 1.7 percent, worse than analysts’ estimates, and decided to slash its forecast for fourth-quarter earnings.

The US Labor Department reported Thursday that initial applications for unemployment benefits dropped unexpectedly last week. Economists had expected an increase. However, the total number of people receiving unemployment benefits rose to the highest level since 1982.

And investors are expecting the December jobless report which is scheduled to be released on Friday. Economists predicted a loss of jobs for a 12th straight month.

Technology shares gained strongly Thursday, with Nasdaq sent to the plus area and ending more than 1 percent higher.

The Dow Jones fell 27.24, or 0.31 percent, to 8,742.46. Broader indexes advanced. The Standard & Poor’s 500 index climbed 3.08, or 0.34 percent, to 909.73, and the Nasdaq composite index rose 17.95, or 1.12 percent, to 1,617.01.

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