Daily Wrapup

Dow up 173.35 (1.57%). NASDAQ up 38.39 (1.55%). S&P 500 up 18.10 (1.54%). Not a bad day, particularly if you manage not to think about what happened the last few days. Of course, we need at least one more day like today just to make up for Tuesday's wretched performance, but let's not dwell on that right now.

Most of the credit seems to go to the GM IPO, and to the Philadelphia Fed Index. GM managed to trade something like 452 million shares today, and it managed a $0.89 premium for it's IPO buyers, even at it's low for the day. Good on you, you lucky few who managed to get the shares at the IPO. Good on you. And the Philly Fed Index was just too good to be believed. Also, if you're concerned about the PIIGS, there was good news there. Quoting from Reuters:

Ireland's central bank chief expected the country to receive tens of billions of euros in loans from European partners and the International Monetary Fund to help shore up its shattered banks and stabilize the economy.

"The fear was what would happen if Ireland were to go down, what reverberations and aftershocks we were going to see," said Paul Larson, equities strategist at Morningstar in Chicago.

"What this does is to steady that first domino."

Markets have fallen recently on concerns that unless Ireland received a bailout, problems in other heavily indebted euro zone members would spread, hindering a global recovery.

Shattered banks. Gotta love that turn of phrase.

GM's IPO and US data lead to stocks' strength

* GM IPO leads the charge for global stocks
* Government bond prices fall, Irish debt tensions ease
* Commodity prices rebound (Updates with U.S. markets, GM's public trading debut)

By Daniel Bases
NEW YORK, Nov 18 (Reuters) - A blockbuster General Motors Co stock offering dovetailed with upbeat U.S. economic data and easing Irish debt tensions to lift global stocks on Thursday, while the dollar gained on the yen and cut losses versus the euro.

GM's return to the market less than 18 months after it emerged from government-funded bankruptcy raised $20.1 billion, the largest initial public offering in U.S. history, and provided a positive backdrop for investor sentiment.

"The company has rid itself of a lot of liability costs, so there is good reason for this excitement and demand," said Paul Larson, equities strategist at Morningstar in Chicago. "And with all the pent-up demand for vehicles, the outlook for the whole industry is very bright."

Commodity prices rose while U.S. government debt prices fell as credit tensions eased.

Manufacturing activity in the U.S. Mid-Atlantic region grew much more than expected, according to a survey from the Philadelphia Federal Reserve Bank. An improvement in the latest weekly initial claims for jobless benefits also helped strengthen the U.S. dollar.

The U.S. data helped erode the euro's gains as uncertainty about the Irish crisis ebbed after Dublin agreed to work with a European Union-International Monetary Fund mission on steps to shore up its shattered banking sector.

But analysts remained skeptical that any rebound in risk appetite would be sustained, with fiscal problems still severe in Ireland and other peripheral euro-zone countries such as Portugal, and many investors inclined to cut risk exposure before year-end.

"It's absolutely vital for the authorities to take pro-active steps in order to try to resolve this crisis as soon as possible. The market should see some relief in relation to that," said Henk Potts, equity strategist at Barclays Wealth.

In late morning trade, the Dow Jones industrial average rose 177.83 points, or 1.56 percent, to 11,179.71. The Standard & Poor's 500 Index gained 19.55 points, or 1.66 percent, to 1,198.14. The Nasdaq Composite Index climbed 46.94 points, or 1.89 percent, to 2,522.95.

GM's common stock, priced at $33 in the initial public offering on Wednesday night, was up 6.8 percent at $35.25 around noon on the New York Stock Exchange.

The pan-European FTSEurofirst 300 index of top shares climbed 1.34 percent to close provisionally at 1,107.07 points after being as low as 1,091.06.

The MSCI world equity index was up 1.71 percent after touching a one-month low the previous day.

The gains came after Japan's Nikkei jumped 2.1percent to close above 10,000 for the first time since late June, while China shares also rose. Emerging stocks were up 1.6 percent.

EURO'S GAINS PARED
The enthusiasm for stocks led to some paring back of the euro's gains after Ireland's central bank chief said he expected Dublin to receive tens of billions of euros in loans from European partners and the IMF.

The euro was up 0.73 percent at $1.3618, but that represented a pullback from its earlier gain of 1.1 percent to a session high of about $1.3668 on trading platform EBS.

The dollar was down 0.48 percent against a basket of currencies.

The dollar rose 0.47 percent to 83.63 yen .

The benchmark 10-year U.S. Treasury note fell 17/32 of a point in price, pushing the yield up to 2.95 percent.

The 10-year Irish/German government bond yield spread was last at 567 basis points, around 15 basis points tighter for the day but off the session's tightest levels.

U.S. crude oil futures rose $1.78 to $82.22 per barrel and retraced part of a four-session drop, while spot gold gained $19.40 to $1,356.20 an ounce. (Reporting and writing by Daniel Bases; Additional reporting by Jessica Mortimer, Wanfeng Zhou, Ryan Vlastelica, Atul Prakash and Neal Armstrong; Editing by Jan Paschal)

FW: Well. I Didn't See That Coming.

The Philadelphia Fed's Business Outlook Survey is out now, and it's... well... see for yourself.

We were looking for a 5.6 result for November; good, but only marginally so. Instead we got a 22.5, which administered a savage beating to the expectations. Some of the driving factors are:
* 27% of surveyed firms reported increases in employment, while only 14% reported decreases
* 29% of surveyed firms expect to increase employment over the next 6 months, whole only 7% expect to decrease employment.
* The future prices paid index increased by 7 points, while the future prices received index increased 18 points, indicating a probable increase in revenue..

You can read the release yourself at http://www.philadelphiafed.org/research-and-data/regional-economy/business-outlook-survey/2010/bos1110.cfm.

Jobless Claims, the Philadelphia Fed's Business Outlook Survey, And An Addendum To Yesterday

First, the addendum.

One of my readers, pointed out to me that I may have been a little... one-sided, or perhaps unfair, about core CPI. I'll let him speak for himself, because he put it very well: "As a long term statistical measure of inflation, including statistical outliers does not make sense. The core prices are not as heavily influenced by outside factors such as currency fluctuation, natural disasters, or political pressures as food and fuel. So from the standpoint of helping [the casual reader] understand the significance of changes in CPI, I understand why you'd reference the buying power of someone's paycheck. We can all understand how the price of a tank of gas changes wildly over a 6 month period, this is a given. But from a long term perspective, volatile food/energy prices can lead to a misleading measure of inflation."

I'll go on record as saying that I think the inclusion of the volatile food and energy prices gives a more accurate measure of inflation, but I will also go on record as saying that's one of those things that real economists have been arguing about for decades. So don't feel like you have to accept my opinion. And thanks to the reader for pointing all of this out.

Now. On to the metrics.

First out of the gate are first time jobless claims. These aren't a really huge market mover, not like the Employment Situation report, because all it shows is how many people filed for unemployment insurance for the first time. It doesn't really say anything about how many people left the unemployment rolls (due to finding employment or running out of benefits) or what the unemployment rate is. It's still interesting, because a rising trend is still bad, but it's not an earthshaker.

For the week ending 11/06, we saw 435,000 new jobless claims. Analysts are looking for 445,000 claims for the week ending 11/13 - an upward trend if accurate, but not terrible. The actual results will be near the bottom of the article.

The other metric is the Philadelphia Fed's Business Outlook Survey, also known as the Philadelphia Fed Index. It's a survey of manufacturers in the Philadelphia, New Jersey, and Delaware about general business conditions. The results use zero as a centerline, with anything greater than zero indicating growth and anything below zero indicating contraction. For October we saw a tepid result of 1.0, and for November the analysts are expecting a 5.6 - still weak, but improving. Investors like this because it's considered an indicator of manufacturing sector trends. And growth in the manufacturing sector helps drive growth across the economy.

Look for the Philly Fed Index at 10 AM.

How did we actually do with first time jobless claims? 439,000. That's up from the prior week, but it beat expectations by about 6000 claims. You can see the details in the Department of Labor's official report.