Market Talk

US stocks mixed in a very quiet session, after import prices show another monthly rise, albeit on the back of surging gas prices, and Treasury yields and crude futures ease off their recent highs.

Late buying pulls indexes higher. DJIA rises 28 (0.3%) to 8799; up 0.4% on the week. S&P 500 adds 1 to 946, which represents a new year high; after briefly crossing 950 yesterday, S&P is still stuck under that mark, and there’s significant resistance here. Nasdaq Comp slips 4 to 1859. Big Board volume once again low, with composite volume of just 4.47B shares, well below the daily average.

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GM CEO Fritz Henderson outlines several examples of how GM’s culture needs to improve as it works through bankruptcy.

“We can’t just be a smaller GM; we need to be a different GM, too,” Henderson writes on GM’s FastLane Blog.

In addition to becoming leaner, more competitive and ultimately profitable, he mentions several aspects of GM’s culture that need to change, with greater risk-taking as the toughest and most important change that needs to be made.

“Risk aversion stems in part from 75 years of being the biggest automaker in the world,” Henderson says. “By playing ‘not to lose,’ we sometimes lost our way. We’re changing that right now.”

Would you buy stocks sporting a PE of 130? Well, that’s the S&P 500′s current PE, based on reported earnings, FT points out (citing data from Barron’s.)

“As we all know, 2008 was not a good year and if earnings recover this year the PE will fall back,” Neil Hume writes. “But the point here is that earnings will have to recover very, very sharply indeed for the PE to approach anything like normality. Of course banks making money and not taking massive write-downs will help, but it is still a long way back from 130 times.”

S&P 500 currently flat.

Lawmakers slammed Bank of America (BAC) chief Ken Lewis yesterday on Capitol Hill, yet BofA shares enjoyed their biggest rally in nearly a month, and have continued the upward swing today.

Congress was looking back at Lewis’ decision to buy Merrill Lynch, but LA Times’ Money & Co. blogger Tom Petruno notes the stock market is more interested in the future than the past.

From Petruno:

New revelations about the bitter negotiations made for great theater at a House hearing. But the stock market isn’t much interested in the past. What matters now is how BofA comes through the recession and what it might be able to earn on the other side.

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Did that fade give you a little pause? Yesterday, stocks flipped the script, performing strongly during the day only to slide into the close. Stock futures down a bit this morning. S&P 500 crossed 950 but couldn’t hold the level and remains near the top of its recent range.

Lately, S&P futures down 5.40, DJ futures down 45.

Ten-year yield touched 4% Wednesday but quickly fell back from there, lately at 3.81%. Still, mortgage rates are rising and the Fed apparently isn’t inclined to arrest that. For now it seems like both stocks and bonds have an upper limit to their trading range.

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