News at a Glance
Bouncing Higher: Major indexes each gain more than 1%.
Oil Eases: Crude nears $124 a barrel.
Fed Signal: Chicago chief calls policy "accommodative."
Bold Release: RIM introduces faster BlackBerry.
The Lowdown
Wall Street began this week better than it ended the last one.
Stocks finished higher Monday, as traders went bargain hunting and rallied behind lower oil prices. The Dow Jones Industrial Average gained 130 points at 12876. The Nasdaq picked up 43 at 2488, and the S&P 500 rose 15 to 1404.
The rally lifted each of the major sectors and effectively negated the Dow's Friday loss.
Financials gained ground after HSBC said it had seen a rise in first-quarter profits and MBIA shored up its insurance unit with a cash infusion. The sector's gains were held in check somewhat by more strife at AIG.
Techs also performed well after Research in Motion unveiled its latest BlackBerry device.
Consumer cyclicals and capital goods advanced as the promise of lower oil prices lifted the outlook for margins going forward. Crude futures eased off their record highs. Shortly before 4 p.m., oil traded down $1.95 on the day at $124.01 a barrel.
Meanwhile, the dollar dipped again after an early rebound. By the end of the trading day, the euro purchased $1.5540, up from $1.5480 in late trading Friday.
In economic news, the outlook for interest rates remained steady. Charles Evans, President and Chief Executive Officer of the Federal Reserve Bank of Chicago, called the current monetary policy "accommodative" and said the Fed had struck a good balance. "The current stance roughly balances out substantial risks to the outlooks for both growth and inflation -- which I see as being to the downside for growth and to the upside for inflation," he said in prepared remarks.
The markets have shown a great deal of volatility lately. Heading into today, the Dow had recorded triple-digit losses in two of its last three sessions, leaving the blue-chip index well below 13000.
Corporate News
HSBC (HBC), the largest bank in Europe, said its results improved during the first quarter, Reuters reported. HSBC, which will report interim results on August 4, said its booming business in Asia helped rescue first-quarter profits from a $3.2 billion charge on bad debts in the U.S. market. Separately, Reuters reported that the firm has no intention of splitting itself up.
AIG (AIG), on the other hand, is facing calls for a breakup from its airplane-leasing unit, The Wall Street Journal reported, citing anonymous sources. International Lease Finance has expressed concern that the parent company's troubles will weigh on the unit; its ability to borrow money could be compromised by threats to AIG's credit rating. Separately, Barron's reported that the firm's first-quarter performance may have put chief executive Martin Sullivan's job at risk.
MBIA (MBI), the Armonk, N.Y.-based bond insurer, swung to a first-quarter loss on heavy writedowns and a steep decline in the value of its insured derivatives. MBIA lost $2.4 billion, or $13.03 a share, compared with a net gain of $198.6 million, or $1.46 a share, in the year-ago period, the firm said. Analysts had been looking for a loss of 11 cents a share.
Sprint (S) saw its first-quarter loss widen as more of its subscribers abandoned their plans. Sprint lost $505 million, or 18 cents a share, down from a loss of $211 million, or 7 cents a share, in the year-ago period, the wireless carrier said. Sprint saw its post-paid subscriber base fall by more than a million users during the period.
Research In Motion (RIMM) drew back the curtain on its latest smartphone. The BlackBerry Bold runs on a 3G wireless network, which allows for faster access to the Internet than that of its earlier models, RIM said. The device, which faces competition in the U.S. from the Apple (AAPL) iPhone, looks remarkably like it.
The Economy
The April budget statement is scheduled to be released Monday at 2 p.m. by the Treasury Department. In 2007, the April budget deficit came in at $177.7 billion. Economists predict the monthly deficit will have narrowed last month to $157.5 billion.
ReadMe
The Associated Press on the economy: The headline numbers of recent indicators are exaggerating the health of the economy. STORY
The Washington Post on nuclear power: As oil prices surge, more countries are planning to develop nuclear capabilities. Some appear to have motives beyond cheap power. STORY
The New York Times on the Fox Business Network: The business channel is changing its daytime lineup in an effort to lift viewership. You can hear all about it on CNBC. STORY
WatchMe
Extreme Engineering: The episode tracks the construction of the world's largest residential building, the Turning Torso, in the not-quite-overheated housing market of Malmo, Sweden. SCI, 7 p.m.
Modern Marvels: A look at the history of the freight train business, one of Warren Buffett's pet industries. HIST, 8 p.m.
The Detroit Auto Show: The auto industry's 2008 trade show includes a look at advances in hybrid technology and cars made in China. CNBC, 9 p.m.
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