Stocks Turn Higher After Freaky Friday – November 2, 2009

Stocks Snap Back from Big Losses

Stocks returned to positive territory on Monday after capping last week off with major declines. For most of the session, the Dow Jones Industrial average made triple digits gains. The market has been shifting direction in recent days as investors try to determine whether the bets they’ve been placing on a rebound in the economy are still sound. Stocks rallied in the morning after a key manufacturing index spiked to its highest level in three and a-half years in October. Weakness among financial, tech and transportation shares limited today’s gains. However, investors managed to hold onto some of the gains until the closing bell. In other news, CIT Group finally filed for bankruptcy protection on Sunday as part of a reorganization plan. U.S. light crude oil for December delivery gained $1.13 to settle at $78.13 a barrel on the New York Mercantile Exchange. Bond prices fell. The yield on the benchmark 10-year Treasury note rose to 3.42 percent from 3.39 percent. The dollar slipped versus the euro and gained on the yen.

Sparking Headlines

The direction of the housing market is becoming more difficult to predict. One minute we’re flooded with data suggesting that the market is improving and then additional indicators suggest otherwise. Today’s news points more to the positive side. Pending home sales increased for the eighth consecutive month as the index grew 6.1% in September. However, many analysts are suggested that the index is set for a decline in the near future.

Analyzing Pending Home Sales — Let’s take a deeper look at the latest report.

Video — Betting Against Housing Market

Some more encouraging news came from The Institute for Supply Management. Its manufacturing index grew for the third consecutive month after 18 months of declines.

Hector Ruiz, the former chief executive of Advanced Micro Devices Inc. (AMD), will step down from his current post as chairman of a joint venture between AMD and the Abu Dhabi government following reports that he had insider trading ties to Galleon Group LLC. Robert Moffat, a senior IBM (IBM) executive who was arrested in an FBI insider trading sting this morning was also terminated.

Will Moffat/Ruiz Departures Distance IBM, and AMD from Scandal?

The US Supreme Court began hearing arguments Monday in a mutual fund case that could profoundly affect investors and the industry. Depending on the court’s decision, it could put the squeeze on mutual-fund profits, force fund companies to provide more disclosure and trigger a re-evaluation of the way their boards evaluate and approve fees.

Fear of acquiring the H1N1 virus is turning a lot of people into germaphobes. As a result, Clorox Co.’s (CLX) earnings rose 23% for its fiscal first quarter on improved profit margins and increased sales of disinfecting products.

Ford Motor Co. (F) has come a long way from the nearly $30 billion in losses it racked up between 2006 and 2008. The only US automaker to avoid bankruptcy posted third-quarter net income of $997 million and its first operating profit since early 2008.

Ford Earnings: Analysts Aglow ; ‘Everything Going Right’

Other Juicy Tidbits

How Big Banks Fleece You and Me

Washington’s inconvenient economic truths — As politicians plan for midterm elections, they’re going to get all tied up about who gets credit for a recovering economy.

Turnaround Letter Not for Faint of Heart

How to Prepare Your Portfolio In Case the Market Sells Off — What should you do with your money if the Dow Jones Industrial Average drops like the temperature this winter?

Is your tax preparer a crook? — If a tax pro offers to quadruple your deductions or eliminate your tax bill, be wary. Without stricter licensing rules, you’ll have to watch your own back.