Monday’s Market Recap: Stocks Indifferent As They Await Unveiling Of New Rescue Program

The market was indifferent today as President Obama stressed the importance of the economic stimulus package and the timeliness that it is passed, citing that the nation may be in danger of slipping into a deep irreversible crisis.  The Dow Jones Industrial Average (^DJI) slipped -0.12% to a close of 8,270.95 while the Nasdaq (^IXIC) and S&P (^GSPC) moved -0.01% and 0.15% respectively to levels of 1,591.56 and 869.90.  Crude oil slumped -1.5% to a close of $39.56 as market reports on United States oil inventory data will be released on Wednesday morning.  Gold as well as copper as slipped -$17.6 and -$0.20 respectively to levels of $896.70 and $1.60.  An administration official said the overhaul of the government’s $700 billion financial rescue program is likely to include a partnership with the private sector to buy troubled assets.  Treasury Secretary Timothy Geithner will give a speech on Tuesday at the Treasury Department unveiling the new program.

General Motors Corp. (GM) is in talks with its former parts arm Delphi Corp. (DPHIQ.PK) in matters of taking back some Delphi factories, most those which make key parts for GM vehicles.  Delphi, whom is operating under chapter 11 bankruptcy for neawrly three years now, is struggling like most suppliers due to the falling auto market.  The company last week asked a bankruptcy judge to allow it to cancel health care and life insurance benefits for 15,000 current and future salaried retirees, citing the steep downturn in the overall auto industry in recent months.  GM also is considering further white-collar job cuts on top of the 3,460 who took buyout and early retirement offers last fall.

American International Group, Inc.’s (AIG) consumer lending unit was downgraded by Standard & Poor’s to junk status of BB+ from BBB.  S&P attributed the downgrade to weakening economic conditions which will continue to put pressure on AIG’s sub-prime consumer base, which may lead to higher credit losses and further quarterly losses.

McDonald’s Corp (MCD) reported earnings today, posting a global 7.1% rise in same-store sales for their restaurants in January, while noting that same-store sales in the United States were up 5.4%, beating analysts estimates.  Most notably were their sales in the Asia/Pacific, Middle East and Africa areas which grew to the tune of 10.2%.  This was fueled by their convenient operating hours, tailored menu meat items, and promotional holiday sales.

Disclosure: The mutual fund the author manages is long MCD.

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