Obama Bounce: Rocky Session Ends Higher

President Obama's televised address Tuesday night was intended to drum up support for his economic agenda and optimism about the recovery appeared to have worked on Wall Street--at least for half a day Wednesday.

Stocks were higher for most of the session as traders welcomed the President's remarks and surprisingly rosy economic data. But then came the roller coaster ride. An unexpected weak sale of 5-year Treasury notes made some traders skittish. Early triple-digit gains were erase by 3 p.m. But a frenetic buying spree in the last hour of trading put stocks in positive territory once again. The Dow Jones Industrial Average gained 89 points at 7749. The Nasdaq gained 12 to 1528, and the S&P 500 moved up 7 to 813.

In his speech to the nation last night, Obama pointed to "signs of progress" and said the nation was "moving in the right direction."

"We've put in place a comprehensive strategy designed to attack this crisis on all fronts," he said. "It's a strategy to create jobs, to help responsible homeowners, to restart lending, and to grow our economy over the long-term. And we are beginning to see signs of progress."

The President also defended his 2009 budget, which calls for a spending hike resulting in a $1.8 trillion deficit this year and a $1.4 trillion shortfall in 2010, according to Congressional Budget Office estimates.

"There are no quick fixes and there are no silver bullets," he said.

A report released Wednesday seemed to corroborate Obama's schedule for recovery. The UCLA Anderson School of Management's quarterly economic forecast predicts the Gross Domestic Product will fall 6.8% during the first quarter of this year, followed by declines of 4.5% and 1.7% in the second and third quarters. However, the report predicted a turnaround in 2010, when average quarterly growth is projected to reach 2.7%.

For now, traders warmed to rosier than expected economic data. In February, durable goods orders and new home sales each rose by more than economists had projected.

In finance, Treasury Secretary Timothy Geithner said he would push for new rules to curb risk to the financial system and new regulations to protect consumers. "The framework will significantly raise the prudential requirements, once we get through the crisis, that our largest and most interconnected financial firms must meet in order to ensure they do not pose risks to the system," he said at the Council on Foreign Relations.

In energy, oil prices slipped on a bump in crude inventories. Oil traded down $1.14 at $52.84 a barrel.

In world markets, Japan's Nikkei slipped 0.8%, while Hong Kong's Hang Seng climbed 2.1%. In Europe, the U.K.'s FTSE stood down 0.2% in afternoon trading.