Wall Street Quietly Digs Out of China-Fueled Slide


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Overcoming concerns about China's Christmas Day lump of coal, snow-blanketed Wall Street landed in a stalemate and well off its worst levels on Monday despite extremely light trading volumes.

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Today's Markets

The Dow Jones Industrial Average fell 18.46 points to 11555.71, the Standard & Poor's 500 Index gained 0.80 points to 1257.55 and the Nasdaq Composite picked up 1.67 points to 2667.27.

In addition to worries about China deciding to hike interest rates for the second time in two months, Wall Street had to overcome Mother Nature, which left parts of the East Coast under more than two feet of snow and produced the New York Stock Exchange's lowest full-day composite volume since December 31, 2009.

The blue chips had been down more than 50 points earlier in the day, but managed to slash virtually all of those losses.

Even though the East Coast has been slammed by a major snow storm, the New York Stock Exchange opened on time Monday. However, it's been a very slow day on Wall Street due to the blizzard and many traders taking vacation in between the Christmas and New Year's holidays.

At the same time, traders had virtually no major economic or earnings reports to use for guidance on Monday.

The mini slide on the Dow eats into what has been a very bullish month on Wall Street as all three major indexes have climbed more than 5% in December. In fact, Wall Street landed at 28-month highs last week amid growing optimism about the economy.

China gave the global markets a lump of coal on Christmas by once again tightening its monetary policy, raising concerns that the Asian giant will be too aggressive in trying to cool down its red-hot economy. The global economy relies on China's economic engine and commodities depend on the country's heavy appetite for materials like copper.

The bulls would argue it's a positive sign that China needs to raise its interest rates as it is a sign of expectations for strong economic growth.

Under scoring the demand worries, crude oil fell 51 cents a barrel, or 0.56%, to $91.00. On the other hand, economically-sensitive copper advanced 0.54% a pound to $4.275 and gold gained $2.40 a troy ounce, or 0.17%, to $1,382.40.

Retailers like Best Buy (NYSE:BBY) suffered slight losses amid concerns that the blizzard will hurt sales during the crucial month of December. Some analysts estimated slower traffic due to the storm will lower retailers' quarterly sales.

Airlines such as JetBlue (NASDAQ:JBLU) and American Airlines parent AMR Corp. (NYSE:AMR) closed mixed despite heavy delays at airports around the country due to the snow storm. New York area airports weren't expected to resume service until 4 p.m. ET or later.

Corporate Movers

American International Group (NYSE:AIG) soared 9% after securing $4.3 billion in credit lines from a slew of bank, led by JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC) and Citigroup (NYSE:C). The move brings the bailed-out insurer closer to separating itself from the U.S. government.

H&R Block (NYSE:HRB) sold off 7% in the wake of a U.S. decision that will scuttle the largest tax preparer's tax refund anticipation loan program. The Office of the Comptroller of the Currency told HSBC (NYSE:HBC) not to offer the loans to customers due to their high interest rates. But H&R Block relies on the program to attract new customers.

Cal-Maine Foods (NASDAQ:CALM sank 3.5% after revealing an unexpected decline in fiscal second-quarter profits. The egg maker said it earned 63 cents a share last quarter, missing the 72 cents analysts had called for. While Cal-Maine was hurt by higher feed costs, its revenue climbed 2.3% to $234.5 million.

General Electric (NYSE:GE) unloaded its Mexican mortgage business, including $2 billion of commercial mortgages, to Spanish banking giant Banco Santander (NYSE:STD). GE didn't disclose a price tag on the sale but said it sees the deal closing in the first half of 2011.

Nestle scooped up a majority stake in Turkish confectionery brands Dogan and Balaban. The deal is aimed at giving the Swiss food maker a greater presence in the lower-priced candy market.

Global Markets

The U.K.'s FTSE 100 was closed, but Germany's DAX declined 1.23% to 6970.73 and France's CAC 40 fell 0.98% to 3862.19.

Japan's Nikkei 225 gained 0.75% to 10356 and China's Shanghai Composite dropped 1.90% to 2781.40. Hong Kong's Heng Seng was closed.

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