Morning Update

Going Out with a Whimper

The year that witnessed unprecedented shocks to the financial system and wrenching losses in stocks is heading into the final day on a quiet note. Dell announced changes, and jobless claims declined, lending modest support to shares. The stock market will be open for a full day of trading today but will be closed on Thursday. The bond market is set to close at 2 p.m. ET today and will also be closed tomorrow. Meanwhile, many markets in Europe were closed but London and Paris are ending a short session on a favorable note.

As of 8:35 a.m. ET, the March S&P 500 Index Globex futures is 3 points above fair value, the Nasdaq 100 Index is at fair value, and the DJIA is 34 points above fair value. Crude oil is down $1.35 to $37.68 per barrel, and gold is down $10.00 at $860.00. The overnight LIBOR rate was unchanged at 0.14%, and the three-month LIBOR rate dropped 1 bp to 1.43%.

Dell (DELL $10) announced it will organize globally around three major customer segments - large enterprise, public sector, and small and medium businesses. Including its consumer business, Dell said it believes the four groups will best capitalize on "the company's competitive advantage." In conjunction with the new structure, the second largest maker of PCs said two executives will leave the company.

Jobless claims decline

Weekly initial jobless claims fell 94,000 to 492,000, below the Bloomberg forecast of 575,000. The four-week moving average dropped 5,750 to 552,250, but continuing claims jumped 140,000 to 4,506,000, a fresh 26-year high. The Labor Department said the unusually large decline may have been due to the Christmas holiday and difficulties in adjusting for seasonal factors. Treasury prices are a little lower. The bond market will close at 2 p.m. ET today and on Friday and will be closed tomorrow for the New Year's holiday.

The drop in mortgage rates hasn't done much to encourage potential buyers to get off the fence but it has stoked a boom in refinancings. The US MBA Refinance Index fell a seasonally-adjusted 0.4% in the latest week to 6733.8 and remained just below a five-year high as homeowners continue to take advance of historically low mortgage rates. The Purchase Index improved slightly, rising 1.4% to 320.9 but it still hovers near a cyclical low.

A quiet end to an abysmal year in Europe

Markets across much of Europe are closed today, while stocks in Paris and London ended higher in a short but quiet session following yesterday's rally in the US. Today's gains are broad-based and include the energy group, despite further declines in the price of oil. Today's upward move comes as traders try to end the year on a positive note, but the FTSE 100 in the UK is set to fall about 31% for the year, its worst annual reading since the index was established 24 years ago. France's CAC 40 Index is racking up a more dismal performance and is down over 40% since the start of 2008.

Asia ends on mixed note

Japan and South Korea were closed today. The Hang Seng Index in Hong Kong rose 1.1%, which brought the year's loss to 48%. But China's Shanghai Composite Index extended its losing streak to eight-straight sessions, finishing down 0.7% against the weak economic backdrop. The People's Bank of China said it will use more measures to ensure the stability and security of the country's financial system. The government has already announced plans to boost spending, while the central bank has slashed rates and cut its reserve requirement in order to encourage lending. The Shanghai Composite, which had soared in recent years, fell 65% in 2008.

Separately, China's state-council said it will issue long-delayed licenses for 3G mobile technology but did not provide a timetable. The decision may unleash tens of billions of dollars in new spending for wireless equipment