US stocks gained on Friday with strength among companies that traditionally hold up well during a recession. Banking stocks struggled again, although did rebound from their lows following reassuring comments from Barclays. The Dow Jones gained 68.73 points to close at 8,281.22, the S&P 500 added 6.38 points to end at 850.12. The Nasdaq climbed 17.49 points to finish at 1,529.33.
Barclays had lost 25% on the FTSE during Friday's session, but after the UK close the bank said it expected to report pretax profit for 2008 "well ahead" of expectations. However, Bank of America, JPMorgan Chase and Citigroup all stayed well into negative territory. Bank of America reported a $1.79 billion loss in its fourth quarter, which equates to 48 cents a share, massively below the 8 cent a share profit that had been forecast. The loss was reported just a few hours after the government confirmed it had given the company another $20 billion from bailout funds, together with guarantees on $118 billion of assets related to the bank's recent purchase of Merrill Lynch. JPMorgan slid 6.2% following its fourth quarter results announced on Thursday, which showed a 76% drop in earnings. On Friday Citigroup reported a bigger than expected quarterly loss of $8.3 billion, it also said it would be splitting its business in two, separating its more traditional businesses from the riskier assets. Shares tumbled 8.6%.
McDonalds gave the Dow its biggest lift after the fast food chains chief executive told CNBC that the company expected to continue paying dividends. Shares rose 2.9%, offsetting some of the drag from Bank of America and JPMorgan Chase.
Further job cuts were announced, Advanced Micro Devices said it would lose 1,100 jobs, while the Wall Street Journal reported that Pfizer is looking at cutting as many as 2,400 sale staff.
US light crude oil for February delivery added $1.11 to $36.51 a barrel. COMEX gold for February delivery jumped $32.60 to $839.90 an ounce. Treasury prices slumped, raising the yield on the 10 year note to 2.33% from 2.2%.
The Nikkei gained 26.7 points to close at 8,256.85 this morning. Oil producers led the market higher on the back of a rise in crude prices, while airlines fell on higher fuel costs. Inpex Corp, Japan's largest oil and gas explorer, rose 2.2% after crude prices advanced for the first time in three days. Mitsubishi Estate Co advanced 2.3% after UBS said there is little risk associated with real estate companies.
The Hang Seng added 84.48 points to close at 13339.99 this morning. Oil prices again lifted stocks together with speculation that China's government will aid power companies. Datang International Power Generation, a unit of China's second biggest power company, jumped 5.4 after the China Business newspaper said power generators will receive about $1.5 billion in aid.
The FTSE 100 is currently 70.97 points higher at 4,218.03. The government announced its second British bank rescue package in three months, giving the financial sector a boost. The UK Treasury announced a new plan to guarantee and purchase banking asset. The government will also offer "capital and asset protection" for banks in conjunction with other nations. Barclays surges 17% higher after saying late Friday that 2008 earnings beat analysts estimates. Pearson is 5.3% higher after saying it will report headline earnings growth ahead of expectations. Rolls Royce adds 3.65% after winning a deal to power an Indian pipeline extension in a $130 million gas turbine contract. RBS tops the fallers board, down 22.5%, following news that it will report a loss of more than £20 billion. Economics
There is no major economic news today.
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