OTCPicks Penny Stock Blog

December 8, 2008 -

Wallstreet charged ahead bullishly on Mnday as the Dow and S&P 500 surged ahead more than 3% as investors bet that the automakers will get a first installment of a bridge loan from congress, and on Barack Obama's weekend comments on a plan to implement a major infrastructure investment to help avert a deeper economic slump.

One of the infrastructure heavyweights that are Monday beneficiaries include heavy equipment maker Caterpillar (CAT) up 12%, Freeport-McMoRan (FCX) up 20%, and automakers including Ford (F) and General Motors (GM) were both up more than 16% in early trading on Monday.

After Friday's shocking payroll data that showed the economy shed more than half a million jobs in November, Obama took center stage over the weekend outlining plans for a very ambitious infrastructure investment, the largest since the 1950's.

The news was not all good on Monday. Dow Chemical Co. became the latest company to announce job cuts and plant closures and said on Monday it would close 20 facilities, divest several businesses and cut 5,000 jobs, or 11 percent of its global workforce, in response to the global economic slump. Fears that the year-long U.S. recession will deepen prompted DuPont to cut 2,500 jobs and phone company AT&T to eliminate 12,000 jobs.

U.S. stocks in recent weeks have broken their freefall and overall market down trend. It is likely given the bad news that are likely coming in jobs, continuing foreclosures, in the coming months that the market will continue its bottoming process in a somewhat drawn out way. Stocks are likely to continue to trade sideways within a range into 2009 as the economy struggles to get it's footing.

Stocks do, however, lead the broader economy out of recessions. Upward moves in the stock market always proceed the economy as a whole. So, now it the guessing game as to when stocks will begin to make that sustained upward move, and when the market bottoming process will be complete.

For now, however, there is lots of opportunity to make money if you are a short term trader. It is becoming common to have 3% to 5% swings in the market most any market day lately so you can make money buying stocks, or playing options just on trading the swings.

Also on Monday, investors also appeared more comfortable that the government is closer to legislation that would dole out billions to America's three biggest automakers within a week. Congress is expected to pass a $15 billion bailout for Ford Motor Co., General Motors Corp., and Chrysler as soon as Tuesday.

Other movers on Monday included Dell (Dell) up 12%, KBR Inc. (KBR) up 11%, Nucor (NUE) and Apple Computer was up just under 6%.