Stocks Cut Losses; President Obama Speaks on Wall Street – September 14, 2009

Stocks Recover during Afternoon Trading

Stocks cut losses and headed to higher ground on Monday as investors shook jitters relating to China’s trade rift with the United States. The Dow Jones Industrial added 21.39 points during afternoon trading to end at 9,626.80. Broader stock indicators also advanced during the last hour of the trading session. Market breadth was positive. On the New York Stock Exchange, winners beat losers three to two on volume of 740 million shares. Halfway through the session investors started pumping money into industrials and utilities. Traders also turned their attention to President Obama’s speech on Wall Street where he addressed increased regulation and bailouts. Obama also stated that the economy is returning to normal, but that it will take time. U.S. light crude oil for October delivery fell 43 cents to settle at $68.86 a barrel on the New York Mercantile Exchange. Treasury prices fell, raising the yield on the benchmark 10-year note to 3.38% from 3.35%. US gold futures finished Monday at moderately lower levels as investors decided to grab profits after a swift run up last week.

Straight from the Street

Following the one year anniversary of the collapse of Lehman Brother and the start of the financial crisis, President Obama has issued a warning to bankers. Obama is calling for ‘common sense’ financial rules to prevent catastrophes such as the one from last year from happening in the future.

Video — Preventing the Next Crisis

In an effort to shore up its bottom line, drugmaker Eli Lily (LLY) announced a new restructuring plan. The Indianapolis-based company is also trying to brace for the lost of patent protection for serveral of its key products. Eli Lily is hoping to save $1 billion by eliminating 5,500 jobs by 2011. Unfortunately, this means more people will be unemployed and looking for another position in this horrible job market.

Video — Eli Lilly CEO on Cost Cutting

While we are on the subject of reorganizations, Intel (INTC) announced a management shakeup that shifts greater power to three executive vice presidents. This move comes after the company reported the departure of one of its executives, Pat Gelsinger, to EMC Corp (EMC).

Sprint (S) may have a suitor. Rumors are circulating that Deutsche Telekom AG, the parent company of T-Mobile, may be interested in acquiring the cell phone provider. Shares of Sprint rallied during morning trading. Even if the rumor is true, there are several reasons why Sprint and Deutsche may not connect.

Bank of America (BAC) just can’t catch a break. They already have Attorney General Andrew Cuomo after them and now a judge has rejected a proposed $33 million settlement between BofA and the Securities & Exchange Commission over the bonuses paid to Merrill Lynch executives.

Financial software company Intuit Inc. (INTU) has agreed to purchase Mint.com for $170 million. That’s a whole lot of dough for a company that hasn’t made a dollar in profit yet. In other acquisition news, Avaya Inc. plans to fork over $900 million for a division of Nortel Network Corp. that makes phone systems for businesses. Avaya will also provide $15 million for an employee retention program.

Could antitrust issues derail Avaya-Nortel deal?

Other Juicy Tidbits

A year after Lehman’s collapse sent the economy into a tailspin, the financial industry is still fixated on the pursuit of money. It’s sad to say it, but it looks like the crisis has not altered Wall Street.

There have been lots of claims that this was the worst recession since the Great Depression. The correct answer is that this is not even close to the worst since the Depression.

The Oracle of Oma-Hype?

For a year, lawmakers have struggled and failed to figure out how to make the financial system safer. Is anyone surprised? It’s time to examine the hard truth about financial regulation.

Why Wall Street Is Set To Fail Again — Here’s why another meltdown may occur.