Market Wrap-Up

Traders pushed stocks higher Tuesday, ahead of an announcement by the Federal Open Market Committee Wednesday that many believe will outline a half a percentage point cut to a key interest rate. But it also appeared the pop to stocks Tuesday was due, in part, to some bargain hunting amid relatively light trading volume. The uptick here in the U.S. mirrored overnight results in markets across the globe.

There was another round of spotty economic news. A measure of consumer confidence sunk to one of its lowest levels ever. The Case-Shiller Home Price index posted a 16.6% decline in August vs. the same time period a year ago. The index now sits at a level it hadn't seen since July 2004, according to Bank of America.

As the third-quarter earnings season continued, traders also had to digest a series of announcements that didn't provide any clarity on the broad market. Indeed, U.S. Steel (X) profits tripled during the quarter on higher prices but the company warned the coming quarter would be a tough one. Royal Carribean (RCL), Bemis (BMS) and Check Point (CHKP) beat estimates. Whirlpool (WHR), though, said its net income dropped 9% and that it would cut 5,000 jobs. McGraw-Hill and Panasonic (PC) also released numbers below expectations. There was news that Detroit auto makers were seeking government help.

Nevertheless, traders rallied behind the idea of a rate cut for most of the session. After trading up between 100 points and 200 points most of the session, however, the Dow Jones Industrial Average surged at the close once again. It finished up a whopping 889 points to 9,065. Like sessions during previous weeks, those gains came in the last hour of trading and there was no readily apparent explanation for it.

Oil was relatively flat on the day, closing up $1.23 to the $64 level.

Winners

Germany's stock market had been experiencing a downturn as the credit crisis spread to Europe and the auto industry -- a large driver of the country's economy -- slowed to record low levels. But on Tuesday the country experienced a significant pop. It was difficult to tell just what it meant, though, especially given reports of a huge short squeeze in Volkswagen stock. The iShares MSCI Germany ETF (EWG) gained 18.9%. (Volkswagen is a top holding on this fund.)

Losers

It was a bad day to be short the broad market. The afternoon rally meant short sellers were on the losing end. The ProShares UltraShort S&P 500 ETF (SDS) lost 21.1%.

Wednesday's Notebook

Earnings & Conference Calls
Advance Auto Parts, Aetna, Allied Waste, Ameriprise Financial, BorgWarner, Cardinal Health, CME, Comcast, Corning, DPL, DTE Energy, Famous Dave's, First Solar, Forrester research, Hanes Brands, Hess, Itron, Jones Apparel, Kraft, Legg Mason, Metlife, Moody's, Newmont Mining, Noble Energy, Office Depot, Owens Corning, Praxair, Procter & Gamble, Prudential, TSX Group, Visa

Economic Data
8:30a.m. Sept. Durable Goods Orders

Quick Take

A look at how the industry's most popular ETFs did on Tuesday.