At 7 a.m. ET, Dow Jones industrial average, Standard & Poor's 500 and Nasdaq 100 futures were sharply lower. GM (GM, Fortune 500) stock dropped more than 10% in pre-market trading.

Futures measure current index values against perceived future performance and offer an indication of how markets will open when trading begins in New York.

World markets tumbled, with auto shares leading declines. Japan's Nikkei slumped nearly 5% and major exchanges in London, Paris and Germany were down as much as 3% in morning trading.

"We were starting to see some light at the end of the tunnel, but it's beginning to look oddly like a train," said Art Hogan, chief market strategist at Jefferies & Co., referring to the recent Wall Street rally that now faces a "trifecta of negative catalysts."

Hogan said that Geithner's statement about banks in need of more stimulus is particularly alarming in the face of the "awful" auto industry, which had not been weighing on investor sentiment in recent weeks.

More bad news could be ahead, said Hogan. With the first quarter drawing to a close, he said, "This is will be the time when companies come out and announce that they missed expectations. It's a scheduled time for bad news."

Autos: The Obama administration gave General Motors and Chrysler LLC failing grades for their turnaround efforts late Sunday and forced out GM CEO Rick Wagoner.

The White House said it would provide the ailing automakers operating funds for several weeks, but it is holding out the threat of a "structured bankruptcy" for the firms if they do not revamp their restructuring plans.

GM will get 60 days and Chrysler 30 days in which to make a final push toward proving they can run viable businesses.

President Obama is expected later Monday morning to make a formal announcement about his overhaul of the companies, which have already been given $17.4 billion.

Banks: Treasury Secretary Geithner said Sunday the government has about $135 billion left for bank bailouts and that some banks would need "large amounts of assistance" to survive the credit crisis. (Full story)

Oil and money: Crude for May delivery fell $1.75 to $50.63 a barrel in electronic trading. The dollar fell against the yen and was little changed versus the euro and the British pound. 

NEW YORK (CNNMoney.com) -- Wall Street tumbled Friday at the end of an otherwise upbeat week, stretching the market rally to three straight weeks, for the best run in a year.

The Dow Jones industrial average (INDU) fell 148 points, or 1.9%. The S&P 500 (SPX) index lost 17 points, or 2%. The Nasdaq composite (COMP) lost 42 points, or 2.6%.

All three major gauges rallied more than 20% in just three weeks, but Wall Street pled exhaustion Friday as investors stepped back.

Still, early week gains were enough to boost the weekly tally. The market gauges have now posted gains for three consecutive weeks, the best stretch since May of last year.

While the run could have another 10% to go, it's likely to peter out after that, said Dean Barber, president at Barber Financial Group.

"I think there is momentum here in the short run, but this is the classic bear market rally and investors need to be careful not to fall into the classic bear-market trap," Barber said.

He said that the advance has been based on hope that the recession will soon end because a lot of money has been thrown at the financial sector and the economy. However, fundamentally, the economy remains in bad shape, as do the state of corporate profits.

Financial and technology shares, which led the advance on Thursday, led the retreat on Friday. But declines were broad based and 24 of 30 Dow stocks fell.

President Obama met Friday with executives from JPMorgan Chase (JPM, Fortune 500), Citigroup (C, Fortune 500), Bank of America (BAC, Fortune 500) and other large banks to discuss the financial crisis.

The bankers gave their approval of Treasury's plan to strip bad assets off bank balance sheets. They also discussed the Obama administration's recent proposal to overhaul the financial regulation system.

On the downside, executives at JPMorgan and BofA said that March business conditions weakened after a more encouraging start to the year.

Upbeat comments about the first two months of the year from a number of executives at the nation's largest banks helped fuel the recent advance.

Rapid rally: Since falling to more than 12-year lows on March 9, the Dow has gained 18.8% and the S&P 500 had gained 20.6% as of Friday's close. Also on March 9, the Nasdaq touched a more than six-year low. Since then, it has gained 21.8%.

Better-than-forecast economic reports on housing and durable goods orders this week have added to hopes that the economy is closer to turning around. Investors have also responded well to the latest plans from the government to stabilize the financial system.

On Thursday, Treasury Secretary Tim Geithner outlined a huge overhaul of the regulatory system. On Monday, he detailed plans to purge bank balance sheets of up to $1 trillion in bad debt that is limiting lending.

Economic news: Personal income fell 0.2% in February after rising 0.2% in January. Economists surveyed by Briefing.com thought it would fall 0.1%. Personal spending rose 0.2% in February after rising 1% in January. Economists thought it would rise 0.2%.

The University of Michigan consumer sentiment index rose to 57.3 in March from 56.3 in February, versus economists' forecasts for a reading of 56.8.

Company news: Google (GOOG, Fortune 500) said late Thursday that it was cutting just under 200 sales and marketing positions worldwide. It is the second round of layoffs in Google history.

General Motors (GM, Fortune 500) shares gained on published reports that the government could extend the automaker's restructuring deadline, giving it more time to gain concessions from unions and qualify for more taxpayer help.

The Wall Street Journal said that the government could extend the March 31 deadline by 30 days. On Thursday, GM said that 12% of its U.S. workforce has taken its latest buyout offer. However, the company is still looking to work with the union to alter retiree health care benefits, among other things.

Market breadth was negative. On the New York Stock Exchange, losers beat winners three to one on volume of 1.44 billion shares. On the Nasdaq, decliners topped advancers by almost three to one on volume of 2.12 billion shares.

Bonds: Treasury prices fell, raising the yield on the benchmark 10-year note to 2.76% from 2.73% Thursday. Treasury prices and yields move in opposite directions.

Lending rates declined. The 3-month Libor rate fell to 1.22% from 1.23% Thursday, according to Bloomberg.com. The overnight Libor rate fell to 0.28% from 0.29%. Libor is a bank-to-bank lending rate.

Other markets: In global trading, Asian markets mostly ended higher and European markets ended lower.

In currency trading, the dollar gained against the euro and fell against the yen.

U.S. light crude oil for May delivery fell $1.96 to settle at $52.38 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery fell $16.90 to settle at $925.30 an ounce. 

NEW YORK (CNNMoney.com) -- Stocks surged Thursday, extending the rally that has propelled the major gauges up more than 20% each in just 2-1/2 weeks.

The Dow Jones industrial average (INDU) rose 175 points, or 2.3%, and the S&P 500 (SPX) index rose 18 points, or 2.3%. The Nasdaq composite (COMP) rose 58 points, or 3.8%, and closed in positive territory for the year.

The advance was broad based, with 28 out of 30 Dow issues climbing, led by General Motors (GM, Fortune 500), Alcoa (AA, Fortune 500), Hewlett-Packard (HPQ, Fortune 500), Microsoft (MSFT, Fortune 500), Intel (INTC, Fortune 500) and American Express (AXP, Fortune 500). But other big bank stocks slipped, with the influential financial sector flat on the session.

Best Buy (BBY, Fortune 500)'s better-than-expected earnings report fired up the retail sector.

Since the Dow and S&P 500 fell to 12-year lows on March 9, stocks have been on a tear. As of Thursday's close, the Dow is up 21%, the S&P 500 is up 23% and the Nasdaq is up 25%. But only the Nasdaq is up slightly year-to-date and the Dow and S&P 500 remain below early-February levels.

"The million dollar question is 'Is this real?,'" Kenny Landgraf, principal and founder at Kenjol Capital Management said. "From a technical standpoint, there are buyers coming into the market, so you have the army behind you, which is good."

He said that the recent spate of less- terrible-than-expected economic news was also hopeful, including Wednesday's better-than-expected readings on durable goods orders and new home sales. Investors have also reacted well to the latest government attempts to stabilize the banks.

"At some point, people decide it's time to put money back to work," he said. "But there's still a sense of not wanting to get tricked again after last fall."

Stocks supposedly hit bottom twice before in the current bear market, in both November and October. But Wall Street ended up giving back all the gains accrued following those bottoms and moving even lower.

"This is a bear market rally, not something more," said Drew Kanaly, chairman and CEO at Kanaly Trust. "In bear markets, 25% or 50% rallies are not unheard of and investors should use this as an opportunity to raise more cash."

He said that the recent economic news has only been better because year-ago results were "pathetic."

Friday's main news item is the February reading on income and spending. Personal income is expected to have fallen 0.1% after rising 0.4% in the previous month, according to economists surveyed by Briefing.com. Personal spending is expected to have risen 0.3% after climbing 0.6% in the previous month.

The revised reading on consumer sentiment from the University of Michigan is also due.

Washington: Treasury Secretary Tim Geithner outlined a massive overhaul of the regulatory system in the wake of the financial meltdown of the last 18 months. Speaking before the House Financial Services Committee, he said the changes are needed to repair a system that has "proved too unstable and fragile."

Changes include having a single regulator oversee the biggest financial firms and requiring large hedge funds to register with the Securities and Exchange Commission. Any such changes need Congressional approval. (Full story)

Earlier in the week Geithner and Federal Reserve Chairman Ben Bernanke made the case for broader powers to regulate non-bank financial institutions like insurer AIG (AIG, Fortune 500).

On Monday, Treasury introduced its plan to purge bank balance sheets of up to $1 trillion in bad assets that are limiting lending and prolonging the recession.

Company news: Best Buy (BBY, Fortune 500) reported a 23% drop in fiscal fourth-quarter earnings versus a year earlier. Excluding charges, the retailer earned $1.61 per share, versus economists' forecasts for $1.40 per share.

The company also forecast full-year earnings in a range of $2.50 to $2.90 per share versus estimates for a gain of $2.45 per share. Shares rallied 13%.

General Motors (GM, Fortune 500) said that 7,500 union workers, or 12% of its U.S. factory workforce, took its latest buyout offer as it continues to cut costs in an effort to gain additional federal aid money. GM gained 14%.

Google (GOOG, Fortune 500) said it was cutting just under 200 positions worldwide, with the cuts coming in its sales and marketing divisions. It is only the Internet behemoth's second round of layoffs in its history.

Market breadth was positive. On the New York Stock Exchange, winners beat losers almost four to one on volume of 1.81 billion shares. On the Nasdaq, advancers topped decliners by over four to one on volume of 2.65 billion shares.

Economy: The number of Americans filing new claims for unemployment rose to 652,000 from a revised 644,000 the prior week. Economists surveyed by Briefing.com thought sales would have risen to 650,000.

Continuing claims, a measure of people who have been receiving unemployment for a week or more, rose to an all-time high of 5.56 million.

Fourth-quarter GDP shrank at an annual rate of 6.3% in the fourth quarter of last year, versus an earlier reading of 6.2%. The decline was a 26-year low. Economists thought GDP would shrink by a 6.6% annual rate.

Bonds: Treasury prices rose, lowering the yield on the benchmark 10-year note to 2.73% from 2.79% Wednesday. Treasury prices and yields move in opposite directions.

Both stock and bond investors were also reacting positively to the conclusion of a 7-year Treasury note auction, which was seen as showing good demand. This was a relief after a 5-year note auction Wednesday was seen as being a bit on the weak side.

Lending rates were unchanged. The 3-month Libor rate held steady at 1.23%, where it stood Wednesday, while the overnight Libor rate held steady at 0.29%, according to Bloomberg.com. Libor is a bank-to-bank lending rate.

Other markets: In global trading, Asian and European markets both ended higher.

In currency trading, the dollar gained against the euro and the yen.

U.S. light crude oil for May delivery rose $1.57 to settle at $54.34 a barrel.

COMEX gold for May delivery fell $1.70 to settle at $940.90 an ounce. 

 

NEW YORK (CNNMoney.com) -- Stocks gained Wednesday, mustering up a late-session rally after a choppy session that helped push the S&P 500's two-week gains to 20%.

The Dow Jones industrial average (INDU) rose 90 points, or 1.2%. The S&P 500 (SPX) index rose 7 points, or 0.9%. The Nasdaq composite (COMP) rose 12 points, or 0.8%.

Stocks spiked in the morning on better-than-expected readings on new home sales and durable goods orders, but the advance sputtered out through most of the afternoon. A late-session jump in financial stocks and tech shares helped markets finish higher.

Joseph Saluzzi, co-head of equity trading at Themis Trading, said that the market is having trouble as it is bumping up against some key resistance levels around 820 or 825. He said that the perception of a weak 5-year Treasury auction was also having an impact Wednesday.

Stocks have bounced 20% since March 9th, when the Dow and S&P 500 hit roughly 12-year lows.

Equities have been rallying on optimism that the economy and financial markets are getting closer to stabilizing. In addition, many stocks have been hammered so heavily as to make them attractive to investors again.

But that advance has been losing steam, particularly after Monday's spike of roughly 7% for the major stock gauges, said Christopher Colarik, portfolio manager at Glendmede.

"There's meaning behind the rally,and I do think we've seen the lows, but the bottoming process is going to take time," he said.

Thursday preview: The House Financial Services Committee holds a hearing on regulatory reform, with Treasury Secretary Tim Geithner due to testify.

Economic reports include readings on weekly jobless claims and gross domestic product growth.

The number of Americans filing new claims for unemployment is expected to have risen to 650,000 from 646,000 the previous week, economists estimate. Continuing claims, a measure of people who have been receiving unemployment for a week or more, will also be in focus. Last week, continuing claims hit an all-time high of 5.473 million.

Fourth-quarter GDP is expected to have shrunk by a 6.6% annual rate versus the previous reading of a 6.2% rate. The 6.2% rate was a 26-year low.

Best Buy (BBY, Fortune 500) and homebuilder Lennar (LEN, Fortune 500) report quarterly results before the start of trading.

Bank focus: Stocks overall followed financials, with the broad market retreating in the afternoon along with bank stocks and recharging in the late afternoon as the sector found its footing.

"We're again being led by the financials," Themis Trading's Saluzzi said. "If they break down, the market breaks down."

Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Wells Fargo (WFC, Fortune 500) ended higher after a shaky afternoon. Citigroup (C, Fortune 500) cut some losses. The KBW Bank (BKX) sector index rose 5%, erasing a drop of over 5%.

Market breadth was positive. On the New York Stock Exchange, winners beat losers seven to three on volume of 1.77 billion shares. On the Nasdaq, advancers topped decliners by over two to one on volume of 2.5 billion shares.

Economy: A pair of better-than-expected economic reports added to optimism that the economy is getting closer to stabilizing.

February new home sales rose at an annual unit rate of 337,000 versus a revised 322,000 in the previous month. Sales were expected to rise at a 300,000 unit annual rate, according to a consensus of forecasts from Briefing.com.

An earlier report showed that durable goods orders rose 3.4% in February after falling 5.2% in the previous month. Economists surveyed by Briefing.com thought orders would fall 2.5%.

Durable goods orders excluding transportation rose 3.9% after falling 5.9% in January. Economists thought they would fall 2%.

Also, a report from the UCLA Anderson School of Management showed that real domestic product growth is on track to see quarterly growth in 2010 and 2011, although not in 2009.

Washington: On Tuesday, Federal Reserve Chairman Ben Bernanke and Secretary Geithner testified about the government's $180 billion bailout of American International Group. They said AIG (AIG, Fortune 500) demonstrates the need for the government to have broader power over non-bank financial institutions.

Geithner again made his case for broader powers to regulate flailing companies on Wednesday. In a speech in New York, the Treasury Secretary said that the country should never again have to provide a massive bailout or risk seeing a collapse of the financial system.

President Obama, in a primetime news conference Tuesday, said that it is because of a lack of authority that the AIG situation has gotten worse. Obama also defended his $3.6 trillion 2010 federal budget, which he said is "inseparable" from the overall strategy for economic recovery.

Congressional committees began debating the budget Wednesday, with a final budget not expected until at least next fall.

On Monday, Treasury introduced its plan to purge bank balance sheets of up to $1 trillion in bad assets that are limiting lending and prolonging the recession.

Bonds: Treasury prices tumbled, raising the yield on the benchmark 10-year note to 2.79% from 2.70% Tuesday. Treasury prices and yields move in opposite directions.

Lending rates were unchanged. The 3-month Libor rate held steady at 1.23%, where it stood Monday, while the overnight Libor rate held steady at 0.29%, according to Bloomberg.com. Libor is a bank-to-bank lending rate.

Last week, the Federal Reserve announced it was pumping another trillion into the economy to try to get credit flowing, including $300 billion to buy long-term Treasurys. The N.Y. Fed Bank began buying the securities Wednesday.

Other markets: In global trading, Asian markets ended lower and European markets ended higher.

In currency trading, the dollar fell against the euro and the yen, recovering from bigger morning losses following comments from Treasury Secretary Geithner.

U.S. light crude oil for May delivery fell $1.21 to settle at $52.77 a barrel.

COMEX gold for May delivery rose $12 to settle at $936.70 an ounce. 

NEW YORK (CNNMoney.com) -- Technology and bank shares led a selloff Tuesday, as investors stepped back after the previous session's big rally, Wall Street's best in four months.

The Dow Jones industrial average (INDU) lost 115 points, or 1.5%. The S&P 500 (SPX) index lost 17 points, or 2%. The Nasdaq composite (COMP) lost 40 points, or 2.5%.

Stocks slumped in the morning as investors eyed the AIG hearing in Washington, cut losses in the afternoon and then slipped again near the close.

On Monday, the Dow and Nasdaq each gained 6.8% and the S&P 500 rose 7.1% on Treasury's plan to buy billions in bad bank assets and a surprise rise in existing home sales.

"Yesterday was euphoria and today people are getting more rational and looking behind and beyond the bank plan," said Kevin D. Mahn, managing director at Hennion & Walsh.

He said that, in the long term, the prospects for a stock market recovery are good. But, in the shorter term, the volatility is not going to go away.

However, considering the span of Monday's rally, it was "pretty encouraging" that Wall Street wasn't seeing steeper losses Tuesday, said Ron Kiddoo, chief investment officer at Cozad Asset Management.

Since tumbling to 12-year lows two weeks ago, stocks - as represented by the broad S&P 500 - rallied 18% through Monday's close. The index also surpassed 800, a key resistance level that traders have been watching.

Kiddoo said the lows from two weeks ago were probably a bear market bottom, but market pros are going to remain skeptical after previous "bottoms" proved to be just ledges along the side of the cliff.

"Longer term, I think the lows are in, but we could still retest them," he said. "The market is poised to move higher, but it's going to need another significant catalyst. Otherwise, we'll just drift lower."

Wednesday focus: Investors will be digesting President Obama's televised address from Tuesday night, the second of his presidency.

Additionally, a number of economic reports are due in the morning.

February new home sales are expected to have fallen to a seasonally-adjusted 300,000 unit rate from a 309,000 unit rate in January. Investors will be looking to see if the report mirrors the trend of the existing home sales report from Monday, which showed a surprise rise.

February durable goods orders are expected to have fallen 2.5% after falling 5.2% in the prior month. Durable goods orders excluding transportation are expected to have fallen 2% after falling 2.5% in January.

The government's weekly crude oil inventories report is also due in the morning.

Last week, the Federal Reserve announced it was pumping another trillion into the economy to try to get credit flowing, including $300 billion to buy long-term Treasurys. The N.Y. Fed Bank will begin buying the securities Wednesday.

AIG: Federal Reserve Chairman Ben Bernanke and Treasury Secretary Tim Geithner testified Tuesday about the government's bailout of American International Group.

The government has put more than $180 billion into AIG in an attempt to keep it afloat after it was deemed "too big to fail," due to the breadth of its businesses.

Both Geithner and Bernanke told the House Financial Services Committee that AIG is evidence that the U.S. government needs to have broader power over non-bank financial institutions.

Bernanke essentially said that AIG would have had a less difficult six months if the government had been allowed to regulate or takeover the insurer in September, when the extent of its problems became clear. (Full story)

AIG has been criticized recently for giving out millions in bonuses even as it was taking bailout money. On Tuesday, Bernanke said the Fed wanted to sue over the bonuses, but was discouraged from doing so. Last week, the House rushed through legislation that would have taxed the bonuses. But interest in the bill has cooled, as many employees have returned the bonuses. (Full story)

AIG (AIG, Fortune 500) shares fell 6%.

Financial sector: On Monday, Treasury rolled out its much-anticipated plan to purge bank balance sheets of as much as $1 trillion in sour assets that are limiting lending and prolonging the recession.

The news helped spark a massive rally in bank shares and, in turn, the broader market, as investors hoped that the plan would help stabilizing the financial sector. Economists say stabilizing the banking system is critical to stabilizing the economy.

However, critics say the plan still doesn't resolve the issue of how to value the bad assets so as to establish a price that is palatable to both the sellers and potential buyers.

Financial shares slipped Tuesday afternoon, with Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Wells Fargo (WFC, Fortune 500) all declining. The KBW Bank (BKX) index fell 7.3%.

Among other stock movers, a variety of tech shares slipped, including Intel (INTC, Fortune 500), Broadcom (BRCM), Yahoo (YHOO, Fortune 500) and Applied Materials (AMAT, Fortune 500).

Market breadth was negative. On the New York Stock Exchange, losers topped winners two to one on volume of 1.65 billion shares. On the Nasdaq, decliners topped advancers two to one on volume of 2.03 billion shares.

Bonds: Treasury prices dipped, raising the yield on the benchmark 10-year note to 2.70%, up from 2.66% late Monday. Treasury prices and yields move in opposite directions.

Lending rates were little changed. The 3-month Libor rate ticked up slightly to 1.23% from 1.22% on Monday, while the overnight Libor rate held steady at 0.29%, according to Bloomberg.com. Libor is a bank-to-bank lending rate.

Other markets: In global trading, Asian markets rallied and European markets were mixed.

In currency trading, the dollar gained against the euro and fell against the yen.

U.S. light crude oil for May delivery rose 18 cents to settle at $53.98 a barrel.

COMEX gold for May delivery fell $29.10 to settle at $924.70 an ounce. 

Investors are also awaiting comments from Federal Reserve Chairman Ben Bernanke and Treasury Secretary Tim Geithner, both of whom are due to testify about the government's intervention at American International Group later in the day.

At 7:50 a.m. ET, Dow Jones industrial average, Standard & Poor's 500 and Nasdaq 100 futures were lower.

Futures measure current index values against perceived future performance and offer an indication of how markets may open when trading begins in New York.

Stocks around the world soared Monday, boosted by the U.S. Treasury's plan to remove toxic assets from the balance sheets of banks. The Dow surged 6.8% while the S&P 500 rallied 7.1%. But investors may be ready for a rest after the dramatic advance. Full story

"It wouldn't be a big surprise if there was a negative hangover in the following session," said Ken Wattret, economist with BNP Paribas in London. "Given the scale of the preceding day, you would expect to see a decline.

But given Wall Street's gains over the last two weeks, Wattret detected a bit of optimism in the air, going forward.

"There's a feeling that we're getting to the end of the worse of the news," he said. But he noted that there's plenty to be pessimistic about, including skepticism over whether the toxic assets at the center of the government's plan - and the inspiration for Monday's rally - will ever rise in value.

AIG hearing: Investors will be watching Bernanke and Geithner. Both will testify at a House Financial Services Committee hearing on AIG (AIG, Fortune 500), due to start at 10 a.m. ET. Full story

AIG has been given access to $182 billion in taxpayer funds in the past six months. Recently it paid out $165 million in retention bonuses to employees in the company's financial products division. Those bonuses were written into employee contracts written in early 2008.

But Dan Cook, senior market analyst at IG Markets in Chicago, believes the government has already wasted too much time on the topic of AIG bonuses - and Tuesday's hearing won't help the stock markets.

"We still have an opportunity to wreck the run we've been on with this AIG hearing," he said. "It's such an emotional issue, this AIG thing, but if you look at the [total] cost, it's a drop in the bucket."

World markets: Asian shares extended gains, rising to their highest level in two months. Japan's Nikkei added 3%. Major European markets were mixed in morning trading, with a decline in London's FTSE, but increases in the XETRA-DAX in Hamburg and the CAC in Paris.

Oil and money: Oil prices fell 80 cents a barrel to $53. The dollar rose versus the euro and the yen, but fell against the British pound.