Morning Update

Stocks Limp to the Finish

Markets are nursing slight gains in morning action of the last trading session of the year. Action is expected to remain subdued again today though as many traders have already closed out their books for the year and are away from their desks, which has led to muted moves in recent sessions. In economic news, the last piece of data for 2009 showed first-time claims for jobless benefits unexpectedly fell to the lowest level since July 2008. Treasuries are lower following the report. Note that bond markets will close early today in advance of the New Year holiday, while both stock and bond markets will be closed Friday. In equity news, companies that have received government assistance are back in the news again today as GMAC confirmed yesterday's story that it is receiving a third bailout, this time of $3.8 billion, and an AIG executive has resigned over the salary restrictions imposed by the Obama administration's pay czar. Elsewhere, Time Warner Cable has offered arbitration in its subscriber fee dispute with News Corp, but News Corp indicated that it is not willing to extend the current terms of their agreement. In overseas action, stocks are mostly higher in light trading.

As of 8:40 a.m. ET, the March S&P 500 Index Globex future is 3 points above fair value, the DJIA is 4 points above fair value, and the Nasdaq 100 Index is 1 point above fair value. Crude oil is up $0.05 at $79.33 per barrel, and the Bloomberg gold spot price is gaining $9.78 at $1,102.68 per ounce. Elsewhere, the Dollar Index-a comparison of the US dollar to six major world currencies-is down 0.5% at 77.54.

The dispute between Time Warner Cable (TWC $42) and News Corp. (NWS $16) is approaching a deadline at midnight tonight that could see NWS's Fox-branded television channels removed from TWC's cable systems. TWC late yesterday offered arbitration that would help keep Fox channels on while discussions continue. CEO Glenn Britt remarked that "Consumers should not be held hostage during these negotiations." NWS responded in a note to its employees that extending the current terms past Thursday would "simply extend the period of time that Time Warner profits from our marquee programming without fairly compensating Fox for it." The dispute centers around News Corp. wanting $1 per subscriber per month in return for granting Time Warner Cable permission to carry those channels. In a similar situation last year, Viacom Inc. (VIA $32) threatened to pull its channels such as Comedy Central and Nickelodeon from Time Warner Cable before the two reached a last-minute deal.

Elsewhere, GMAC confirmed yesterday's widely reported story that the government will give it a third bailout, this time of $3.8 billion, which will increase the Treasury's stake in the struggling lender to 56% from 35%. The Detroit-based firm has already been issued $12.5 billion in previous injections. A government stress test earlier this year indicated that the firm needed to raise an additional $11.5 billion in funds to shore up its balance sheet, which GMAC has not been able to obtain through private capital.

Meanwhile, an American International Group (AIG $31) executive has resigned due to the pay restrictions imposed by the Obama administration's pay czar Kenneth Feinberg. Anastasia Kelly, AIG's vice chairman for legal, human resources, corporate affairs and corporate communications, stands to be paid approximately $2.8 million in severance, according to Reuters. She was among five executives previously reported by The Wall Street Journal to have notified the insurer that they were prepared to resign if their pay was cut severely by the government. Earlier this month, Feinberg set compensation limits for the 26th through 100th highest-paid employees at four firms, including AIG, limiting most cash salaries to $500,000. AIG is approximately 80% owned by the US government after receiving roughly $180 billion in taxpayer bailouts.

Jobless claims in focus as traders prepare for year end

Weekly initial jobless claims fell by 22,000 to 432,000, versus last week's figure which was revised slightly higher to 454,000. The Bloomberg consensus called for claims to increase modestly to 460,000 following last week's larger-than-expected drop. The four-week moving average, considered a smoother look at the trend in claims, fell to 460,250 from 465,750, and continuing claims dropped by 57,000 to 4,981,000, compared to the 5,100,000 forecast. Treasuries are lower following the data.

European stocks rise as holiday approaches

Many European exchanges are closed today in advance of the New Year holiday, leaving trading in the region unusually quiet. Among those markets open for trading, Paris's CAC 40 Index and London's FTSE 100 Index are both marginally higher and each of those indices is on pace for annual gains of more than 20% if today's gains hold. Commodities have been one bright spot so far in the session, as metals prices are rising in afternoon trading and the dollar is weakening. Housing-related stocks in the UK are also enjoying support as a report showed home prices in the country increased for an eighth-straight month in December. In total, UK house prices rose by 5.9% in 2009. Wolseley (WOSCF $20), the world's largest supplier of heating and plumbing equipment, is higher after the announcement. Among emerging markets in the region, Turkey's ISE National 100 Index is almost 2.0% higher and back to its highest level in nearly 12 months after local leaders said the nation is close to signing a loan agreement with the International Monetary Fund (IMF).

Asian markets tack on additional gains as 2009 comes to a close

Stocks in Asia sleep walked through the final trading session of the year, with many markets closed or trading in shortened sessions. Japan and South Korea were among the markets closed due to the holiday, while Australia, New Zealand, and Singapore all nudged slightly higher in shortened sessions. In general across the region, trading ranges were narrow and volumes lighter than normal as many traders took off early to begin the holiday. In economic news in the region, China's central bank posted a New Year message on its website in which it pledged to maintain a "moderately loose" monetary policy because 2010 will be a crucial year for strengthening the recovery in the economy and "defeating" the financial crisis. The statement echoed repeated claims by the People's Bank of China this year that it will not remove its economic stimulus measures prematurely. China's Shanghai SE Composite Index gained 0.5% to extend its yearly surge to 80% after the comments. Those gains, coming on the heels of last year's 65% slump, make it the best year for China in two years and bring its gains for the decade to 140%. Today's gains capped an exceptionally strong year for stocks across Asia, as Hong Kong's Hang Seng Index gained 52% for the year, while Australia's S&P/ASX 200 Index ended up 31% higher, and Singapore's Straits Times Index added 65% in 2009.