Around the markets: The Treasury seeks advice; less than meets the eye in the market rally; and Wal-Mart's bull run

Some late-night (or early-morning) reading from around the markets:

-- "We’re not serious, but if we were . . .": The Treasury Department keeps telling us that it has no plans to pump taxpayers’ dollars into struggling mortgage giants Fannie Mae and Freddie Mac, even though it persuaded Congress to give it that authority in last month’s massive housing-rescue bill. But just in case, Uncle Sam said Tuesday it hired brokerage Morgan Stanley to provide advice on how to use the powers granted by the bill. See the full story here. Morgan said it wouldn’t charge the Treasury a fee for this work, just expenses of $95,000.

-- Yes, the stock market is rallying, but you haven’t missed all that much so far: Thanks to another drop in oil prices and a steady Fed, the Dow Jones industrial average scored a 331-point, 2.9% gain on Tuesday, to 11,615.77. It was the biggest one-day advance since April 1. Impressive? Sure -- except that the rally just returned the Dow to within a few points of where it was on July 23. That’s a reminder of how volatile the market’s swings have been in recent weeks.

From its two-year low of 10,962.54 on July 15, the Dow now is up 6%. Broader market indexes have fared about the same. The Standard & Poor’s 500, up 2.9% on Tuesday, is up 5.8% from its low July 15. In part, heavy losses in commodity-related stocks are offsetting gains elsewhere in the market.

-- Not the low-price leader by one important measure: Shares of Wal-Mart Stores Inc. closed above $60 on Tuesday for the first time since the spring of 2004. The stock rose $1.91, or 3.3%, to $60.34 -- boosting its year-to-date gain to 27% (while the S&P 500 is down 12.5%). Remember the corollary that "what’s good for General Motors is good for America"? This year, what’s bad for America (record energy prices and shrinking employment) is good for Wal-Mart, as suddenly frugal consumers rediscover the retailer’s low price tags. And apparently, the market doesn’t care about the tiff involving Wal-Mart’s alleged views on a Barack Obama administration.

Comments

[martscan]

This deal with the Treasury, the "authorities", Morgan Stanley, etc is a total crock. Paulson goes into panic mode, flat out to the wall to get expedited Congressional approval for an open-ended line of credit...to be tapped at his discretion...says it won't be used but hires Morgan Stanley, who agrees to do the analysis at no charge...how patriotic of them. What could a group of CPA types tell Paulson what he doesn't already know about Frick & Frack??

Here's how I see it: Frick & Frack are going to need capital measured in long tons, Paulson can mitigate, if not sidestep, any criticism directed at him since he will act on the recommendation of the unnamed team of patriotic CPAs, Morgan will have tomorrow's race results showing how Frick & Frack crossed the wire, today..and will most likely place an exacta bet somewhere (though they won't get results in the TIMES)..the Central bank stakeholders will be mollified, and everyone can proudly proclaim how they saved the country from a complete financial meltdown...and the taxpayers are on the hook, i.e., screwed..again, for billions and billions. Is this a great capitalistic country or what?

[martscan]

Someone should tell Hank to gear up to activate one of those authorities he's been granted, that were never going to be used ...Frick just reported a $821M Q loss. Naturally, the laundry list of standard, and pre-Armageddon, palliatives has been announced...right on cue.....the dividend cut..the possible equity sale (misery loves company)..."slowing" of mtg purchases (read: buy nothing that has not been committed), the possible reduction of portfolio (who wants any of it?), blah, blah. Sell the DJ on the opening...it was a triple top even without this manna from heaven for Bears.