Wednesday’s Market Recap: Awaiting The Fate Of The Auto Industry Bailout

Markets found their way back into the green after an up and down day of trading on Wall Street. Uncertainty loomed as well as investors await the fate of the auto industry bailout. The Dow (^DJI) gained the least of the three major indexes on a percentage basis going up 0.81%. For the day, the Dow finished at 8,761 points. The Nasdaq (^IXIC) rose by 1.17% and closed at 1,565 points, while the S&P 500 (^GSPC) rose by 1.19% and finished at 899 points. The first half of the day began with buying, followed by a short sell off. Eventually, markets calmed down and finished with steady gains. The Russell 2000 (^RUT)  went up 2.3% and finished at 476 points. In international trading Britain’s FTSE (^FTSE) fell .32%. Japan’s Nikkei 225 (^N225) went up by 3.15%.

The price for a barrel of crude went up 4% to $43.85 on the NYMEX. Natural gas also gained, rising 2.12% and settling at $5.70. Gasoline and heating oil futures settled at $0.97 and $1.40 respectively. Amid the rise in oil prices, energy giants such as the Exxon Mobil (XOM) and Chevron (CVX) rallied.

Nike (NKE) was downgraded to “neutral” from “buy” at Bank of America. A slowdown in demand was the catalyst for the down grade of the athletic shoe maker.

Lowering forecasts has been a common theme recently, as the next company to announce lowered forecasts was Eastman Kodak (EK). The photographic equipment company cut sales and profit projections for 2008. Shares are down 70% on the year.

Troubled Insurer American International Group (AIG) is reported to have lost $10 billion due to exposure in mortgage and corporate debt assets. This money will not come from taxpayers and the government bailout. Instead, AIG will be forced to find a way to pay the losses off.

In other news the dollar was down against the Euro, as bailout hopes loom. The price of gold shot up to settle at $810 on the day.

Disclosure: The fund the author is associated with holds a long position in XOM and NKE.

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