Traders were unnerved at the start of the day by the jobless claims numbers which unexpectedly rose for the second consecutive week and came in at 576,000. This shows that despite anecdotal signs of economic improvement, the labor market remains very weak. Stocks stage a decent rebound later on in the session on the back of improved manufacturing activity and strong performance in the financial and tech sectors. AIG's new CEO, Robert Benmosche, did his part, while on vacation . In an interview from his summer house in Croatia, h e fired up his troops and AIG's stock (to the tune of 21%) by claiming that he will be able to pay back the government and even "do something" for shareholders. He also took a harder line when it comes to being forced to liquidate assets by the Treasury. Sounds like a lot of big talking, now he has to deliver.

Other financials rose on the coattails of AIG and UBS, the latter managed to escape from the claws of the Swiss government, signaling a return to self-sustainability. The Philadelphia Fed index, a reading of manufacturing activity, was the savior of the day. It rose to positive 4.2 in August outpacing expectations which called for a reading of negative 2. This gives credence to all those pundits who believe inventories have been cut down substantially and now business is going to pick up as Corporate America starts producing again. They explain away the disappointing unemployment numbers as a lagging indicator.

So overall, the DJIA rose 0.76% and the broader S&9 500 increased 1.09%. Overseas, the markets were higher too, recovering from the swoon earlier during the week. China has been a big downer with its stock market losing about 20% during the last couple of weeks.

What else caught people's attention today?

The cash for clunkers program will end on Monday at 8 PM. The government will have to find something else to gloat over now .

The White House continues to retreat from their original health care proposal slowly realizing that their backs are up against the wall. The best way to sell reform is not as a money saving measure but as a moral obligation to provide healthcare to everybody who needs it. The President is realizing that . Here are some more details on how the President went wrong .

Comedy Central's Stephen Colbert couldn't resist taking a shot at AIG's new CEO for going on vacation after just one day on the job.

KKR is ready to cash out of Dollar General with an IPO . Smart timing as always, when better to sell a recession staple than at the end of the recession?

The scary thing about Cash for Clunkers is that all praise is going to the heads of Congressmen who are probably going to want to expand their rare bright idea to consumer appliances , electronic equipment , and what not.

Viewpoints

Doctor Doom obviously doesn't want the recession to end . It will take away his street cred.

Is Nouriel Roubini a False Prophet?

Robert Rubin and the irreparable damage Citigroup did to this vaunted legacy - Charlie Gasparino explores .

Other Tidbits

Maybe the French should spend a little bit more time at work .

Before you laud Shaq for being a great businessman, realize that he stole the idea for his reality TV show from Steve Nash.

ESPN is realizing that you need to discount pretty aggressively to sell magazines these days.

BBC is going to make us relive the Lehman debacle from a year ago.