Wednesday’s Market Recap: Stocks Rally After A Week Of Selling

Stocks rallied today (Wednesday) after a week of heavy selling on word of a possible Chinese economic stimulus package and an Obama administration plan to help struggling homeowners; as well as a slightly better-than-expected report on the services sector.  The Dow Jones Industrial Average (^DJI) gained 2.23% to a close of 6,876.32 while the Nasdaq (^IXIC) and S&P (^GSPC) also gained 2.48% and 2.38% respectively to closes of 1,353.74 and 712.87.  Gold lost -$5.10 on the day closing at $908.50 while copper gained $0.115 to a close of $1.72.  Crude oil rose $3.49 on the day closing at $45.13 as the Energy Department’s Energy Information Administration said crude inventories dropped by 700,000 barrels, or -0.2% percent, to 350.6 million barrels, for the week ended Feb. 27.

General Electric Inc.’s (GE) biggest shareholder, The Capital Group Companies, raised its stake by 15 percent in the fourth quarter, leaving the fund manager with a possible paper loss of $920 million after the stock tumbled this year.  Capital Group funds bought 77.8 million shares of GE from October through December.  Fidelity Investments, Dodge & Cox and T Rowe Price Group Inc. (TROW) also increased their holdings during this time period. GE’s stock has plummeted -61% percent in 2009.

Treasury Secretary Timothy Geithner said the U.S. government will mount an ambitious program to crack down on companies that use offshore locales to avoid paying taxes.  Tracking down scofflaws and closing loopholes is especially important at a time when the economy is deteriorating and the government is running a record budget deficit, Geithner told the Senate Finance Committee today in Washington.

Costco Wholesale Corp. (COST) reported its first profit decline in seven quarters as discounting hurt margins and the strength of the dollar eroded international revenue.  Net income fell -27% percent to $239.7 million, or $0.55 cents a share, in the quarter ended Feb. 15, the company reported today.  Profit missed the $0.59 cent median of 18 analysts’ estimates.  Sales at international outlets open at least a year tumbled -11% percent in the three month period.

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