U.S. stocks on Tuesday opened modestly higher following yesterdays drop to a 12-year low. The Dow Jones Industrial Average gained 59 points to 7,174. The S&P 500 Index added 7 points to 751 while the Nasdaq Composite rose 18 points to 1,406. The economic news isn't getting any better. Housing prices dropped 2.5% in December and 19% year over year. All eyes are on the financials once again. JP Morgan opened higher by 2% after cutting their dividend. Good news for them, but if the best capitalized bank is cutting their dividend, then what does that mean to the rest of the industry which is not as well capitalized? Most financials opened higher, but then sold off. GE reversed course, now trading down 4% to new lows. Plenty of earnings coming in from a number of retailers. The list includes Office Depot, Target, Macys, Heinz, Radio Shack, Nordstrom, and Home Depot. Nordstrom and Home Depot are higher. Office Depot is down 14% while Radio Shack is down 19%. Marvel Entertainment is jumnping 15% on good earnings. Foster Wheeler is down 20% on a weaker forecast. At 10 o'clock, the consumer confidence number dropped to a record low sending the averages back toward the unchanged level. After the first hour, the Dow had rebounded up 57 points. The Nasdaq rose by 17 points. Through the morning the averages remained in the green. The Dow did rally over a 100 points before pulling back. In the afternoon the averages rebounded with the Dow jumping over 100 points. The rally is being attributed to Fed Chairman Bernanke easing fears of nationalization of the big banks. Most of the financials improved following the Fed's speech. JP Morgan is up 10% off the lows. In the last hour, the averages kept moving higher. Thanks Mr. Bernanke. The Dow Jones Industrial Average finished up 236 points, or 3.3%, at 7,350. The S&P 500 added 29 points, or 4%, to close at 773. The Nasdaq Composite gained 54 points, or 3.9%, to finish at 1,441.
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