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U.S. Stocks Climb for Second Day; Chevron, Bear Stearns Advance

By Michael Patterson
Jan. 8 (Bloomberg) -- U.S. stocks advanced the most in two weeks, led by miners and energy producers, after gold rose to a record and oil rebounded from its biggest decline in more than a month.
Chevron Corp., the second-largest U.S. energy company, and Schlumberger Ltd., the world's biggest oilfield-services provider, climbed. Freeport-McMoRan Copper & Gold Inc. and Newmont Mining Corp. rallied as prices for precious and industrial metals increased. Bear Stearns Cos. gained after a person with knowledge of the matter said Chief Executive Officer James Cayne plans to resign.

Shares rose in Europe and Asia, led by miners and telephone companies. The Dow Jones Stoxx 600 Index of European shares added 0.9 percent for its first gain of the year.
``With oil where it is right now between $90 and $100, the oil companies do pretty darn well and they still look relatively inexpensive,'' Jeffrey Saut, who helps oversee about $190 billion as chief investment strategist at Raymond James & Associates, said in a Bloomberg Television interview.
U.S. equities also got a boost as the cost for banks to borrow in dollars and euros slid, signaling efforts by central banks to restore confidence in money markets is working. Investors will get further clues on the outlook for economic growth and interest rates from a private report today that may show pending home sales fell for the first time in three months.

Yesterday's Gain
U.S. stocks advanced yesterday for the first time this year, trimming the S&P 500's 2008 slide to 3.6 percent. Equities have retreated as reports on manufacturing and employment suggested the world's biggest economy may slip into recession.
Chevron added 81 cents to $92.94. Schlumberger gained 97 cents to $97.78.
Crude oil for February delivery rose as much as 2.2 percent to $97.20 a barrel in New York on speculation U.S. inventories fell for an eighth week. Prices for gasoline, heating oil and natural gas also advanced.
Freeport-McMoRan, the largest publicly traded copper producer, added $2.77 to $98.23. Newmont Mining, the world's second-largest gold producer, rose $1.58 to $53.10.
Copper increased to a seven-week high, while gold rose to a record as higher oil prices and a weaker dollar spurred demand for the precious metal as a hedge against inflation.
Bear Stearns, the second-largest U.S. mortgage-bond underwriter, added $1.31 to $77.56. Cayne, 73, has begun notifying members of his board that he will step down as CEO and remain chairman of the New York-based company, according to the person, who declined to be identified because the decision isn't public.
To contact the reporter on this story: Michael Patterson in New York at [color=#0000ff][email protected][/color] .

Pending Sales of Existing U.S. Homes Fell in November

Jan. 8 (Bloomberg) -- The number of Americans signing contracts to buy previously owned homes fell more than forecast in November, signaling further deterioration in housing.
The National Association of Realtors' index of pending home sales decreased 2.6 percent to 87.6, following a revised 3.7 percent gain in October that was larger than previously estimated, the group said today in Washington.
More stringent lending practices after the collapse in subprime lending and prospects that home prices will keep falling are deterring buyers, economists said. The housing slump is likely to last well into 2008, hurting economic growth and prompting Federal Reserve policy makers to lower interest rates.
``We'll probably see more weakness in existing home sales given that inventories are so high,'' said James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. ``Prices may keep dropping for a while.''
Economists forecast the index of signed contracts for existing homes would fall 0.7 percent following a previously reported 0.6 percent October increase, according to the median of 33 projections in a Bloomberg News survey. Estimates ranged from a drop of 3 percent to a 0.3 percent increase.
Compared with a year earlier, the index was down 19 percent.

Junk Bond Defaults to Rise Fivefold, Moody's Says (Update4)

By Bryan Keogh
Jan. 8 (Bloomberg) -- The global default rate on high-yield, high-risk bonds will jump more than fivefold by the end of 2008, according to Moody's Investors Service.
The high-yield default rate will increase to 4.8 percent this year and reach 5 percent in 2009 because a weakening economy and ratings cuts will cause more issuers to miss their interest payments, Moody's analyst Kenneth Emery in New York said in a report released today. The default rate finished 2007 at a 26- year low of 0.9 percent.
``We believe December 2007 likely marks the low point of the current default rate cycle as several issuers have missed interest payments in recent weeks,'' Emery said in a statement. That ``should translate into upward pressure on default rates as the 30-day grace periods on these issuers' bonds expire and they become actual defaulters,'' he said.
Buffets Inc., the largest operator of buffet-style restaurants in the U.S., and Florida homebuilder Tousa Inc. missed payments on debt last week, raising concern that corporate defaults will increase as a three-year housing slump slows the economy. The number of companies that lost their investment-grade credit ratings rose at the fastest pace last year since 2003.
The percentage of issuers with debt trading at distressed levels rose to 11.5 percent, the highest since July 2003, the ratings company said. A year ago, the rate was 4.2 percent.

http://www.bloomberg.com/index.html?Intro=intro3

From CNBC

Pending sales of existing U.S. homes inched lower in November and should hold steady over the next few months, a real estate trade group said.

WASHINGTON - Treasury Secretary Henry Paulson said Tuesday the administration was exploring what would be a significant expansion of the program to help at-risk mortgage holders

Yeah by about a kabillion dollars.

Dow erasing the +80 gains.

On the lack of other explaination, I'd say Paulson

Would this do the trick?

LOL... "In Gates we trust" ??

Did I miss something.......

HOLLA

Just the same old BS across the board

HOLLA

Dow just screws up the carry, seriously.

The markets seem to be waiting for something to happen. We need mass fear or mass greed not mass confusion I hate daily rangyness

I agree. The greedy guys aren't that greedy, and the scared guys aren't that scared. Blows.

Don't think that denomination exist, but this does

Hey guys (and gals) check out the cable thread. A lot of bickering, infighting going on. They even managed to bring religion into the mix.

It is the BS thread off all times for a reason! Just provoking a bit :

Dow can't find buyers anymore. Whatever the news, the talks and rate cut sentiment. Early traders even try, but don't find follow through.

I'm now thinking that a broad correction below the 12.7K is on the cards. Too find buyers now, only with killer prices :

I've seen that earlier today... A guy brought GOD into the discussion and ignited the very people that were in flames this morning holding shorts ahead of the news:

We need a break below 1400 on the S & P