Wednesday’s US Market Recap: Cheer As Stimulus Bill Goes Through

Markets reacted favorably as the Democratic controlled Congress and White house agreed to a compromise of the $790 billion economic stimulus bill which in turn has been designed to create the millions of jobs needed in this recession.  The Dow Jones Industrial Average jumped a minuscule 0.64% closing at 7,939.53 while the Nasdaq and S&P moved 0.38% and 0.80% respectively to levels of 1,530.50 and 833.74.  Crude oil and Copper also reacted favorably as they moved $0.14 and $0.16 respectively presenting them at levels of $36.08 and $1.556.   The trade balance data was released today coming in at -$39.9 billion compared to analysts estimates of -$35.7 billion, but since last reporting at a level of -$41.6 billion, have shown signs of improvement.

Chief executives that have received federal-government aid testified today before the House of Financial Services Committee.  These executives, from eight banks and securities firms which have received $165 billion in federal aid, were barraged by United States lawmakers in an attempt to analyze the Troubled Asset Relief Program’s current operations.

Rio Tinto Group (RIO.L) was in talks today to raise as much as $20 billion from Alumin Corp. of China, by selling shares and mine stakes to reduce debt.  The plan is that Chinalco will buy $7.2 billion of bonds and will then take its stake in Rio from 9% percent to 18% percent and will invest $12.3 billion in three of its partnerships involving Rio’s copper, aluminum and iron ore units.  London-based Rio wants to reduce $38.9 billion in debt, taken on after buying Canada’s Alcan Inc. in 2007, by more than $10 billion this year.  Rio is cutting output and selling assets while removing jobs as the global recession curbs demand for metals.  Rio’s shares may be halted until either an announcement is made or until February 16, the company said today in a statement to the Australian stock exchange.

Disclosure: None

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