After Market Summary for Tuesday December 30, 2008

The markets rallied into the second to last trading session of the year, despite dire economic news pertaining to consumer confidence. The biggest shot in the arm the markets got today was from the Treasury Dept. revealing that General Motor’s (GM) financial arm, GMAC, would receive $5B in bailout funds. By the sound of the closing bell, the Dow Jones Industrial average jumped 184.46 points, or 2.17%, to conclude at 8,668.39, while the broader market indicators finished the day in the green as well. At the close, the S&P 500 index added 21.22 points, or 2.44%, to end at 890.64, while the NASDAQ composite index gained 40.38 points, or 2.67%, to close the session at 1,550.70.

The markets maintained their positive direction today as news from the Treasury Dept. stated that GMAC would receive $5B in financing. In exchange for the financing, the government will receive preferred shares of the company that pay and $0.08 dividend, along with warrants that allow the Treasury Dept. the right to buy additional shares at a prearranged price. The government agency also revealed that they would lend GM $1B in additional capital in order to buy more shares of GMAC, as the company is planning to offer shares to increase their capital positioning.

With consumers driving nearly two-thirds of the country’s economic activity, the confidence levels within those consumers have falling to an all-time low throughout December. In a report released by the Conference Board’s Consumer Confidence Index, the survey showed that confidence for the month plunged to 38.0, down from its already revised number of 44.7 in November. Economists were looking for that number to come in at 45.0. The current survey is based on a sample of 5,000 households throughout the country.

Also present within the survey, the Present Situation Index showed that business conditions and employment prospects plummeted nearly 44%, falling to a reading of 29.4, down from November’s reading of 42.3. Additionally, those saying that jobs are hard to come by increased to 42% of those polled, compared to the previous month’s perception of 37.1%. Finally, those polled also concluded that only 12.7% of them would get an increase in their salary in the upcoming year, compared to last month’s total of 13.1%.

As the housing industry and sector continues to decline, more evidence of the severity of the situation seems to surface monthly. In the latest installment, the Standard & Poor’s/Case-Shiller index of 20-cities showed this morning that the price for homes dropped by its steepest amount for the month of October. In the report, the index fell 18% from last October’s reading marking the largest decrease since the index’s inception back in 2000. Additionally, the 10-city index plummeted by 19.1%, its biggest drop in the index’s 21-year history.

Coming off their price peaks, the 20-city survey has seen its prices plunge more than 23% since July of 2006, while the 10-city index has fallen more than 25% from its peak seen back in June of 2005. The declines in prices haven’t been this low since March of 2004. Both indices have posted year-over-year declines for the past 22 months.

The final economic release to come out this morning came from a survey of the business activity in the Chicago region. In the report, the Purchasing Manager Index (PMI) moved slightly higher in December, advancing to 34.1%, up marginally over November’s reading of 33.8%. The Chicago PMI is a diffusion index that includes questions about new orders, prices, inventories, and general business conditions to the company’s managers. Any reading below 50 indicates a contraction in business conditions and the overall economic environment of those companies surveyed.

With no companies reporting earnings before the market today, or for the rest of the week for a matter of fact, there were a handful of smaller companies reporting their results after the market’s close on Monday evening.

One of the first to report was Bridgeline Software Inc. (BLSW), who is a developer of award winning web applications and an on-demand web based platform called Orgitecture. This scalable on-demand web based platform provides expandable modules such as Content Management, Relationship Management, eSurvey, eNewsletter, eCommerce, Event Registration and Integrated Grants Management. In their announcement, BLSW stated that the company posted a net loss for their full-year 2008 of $10.3M, or $1.09 per share, compared to a net loss of $1.9M, or $0.36 per share. Despite the company’s loss widening year-over-year, BLSW did manage to increase their overall revenues, climbing from $11.2M to $21.3M, an increase of 91% year-over-year. During today’s trading session, shares of BLSW were trading lower, giving up $0.0439, or 6.8%, to trade at $0.6060 per share. Read more about Bridgeline Software Inc. at MarketWatch

A second company to report their results after the close Monday evening was Onstream Media Corp. (ONSM), which are a leading online service provider of live and on-demand Internet video, corporate web communications and content management applications, along with providing live and on-demand webcasting, webinars, and web and audio conferencing services. In their statement, ONSM recorded a net loss for their 4Q, which amounted to $1.27M, or $0.03 per share, versus last year’s net loss of $1.73M, or breakeven on a per share basis. As for quarterly revenues, ONSM was able to post overall sales of $4.37M, up nearly 7% over last year’s revenues of $4.09M. Through today’s trading session, shares of ONSM posted a dip in trading, falling $0.03, or 10.7%, to trade at $0.25 per share. Discover more about Onstream Media Corp. at Reuters

The final company to release their earnings information was Rick’s Cabaret International Inc. (RICK), which currently owns and operates premiere adult nightclubs offering adult entertainment and restaurant and bar operations in Houston, New Orleans, and Minneapolis. In the company’s release, Rick’s managed to increase net earnings year-over-year, as the company was able to acquire five additional clubs throughout the year. For the full-year 2008, RICK managed to record net income of $7.66M, or $0.91 per share, measured against last year’s net income of $3.05M, or $0.50 per share, an increase of 151% year-over-year. As for revenues, those figures were able to increase more than 87%, jumping from $32.01M to $59.93M. Despite a positive yearly result, investors remain leery of the company’s forward looking performance, thus pushing shares of RICK down in trading today, giving up $0.65, or 14%, to trade at $3.99 per share. Learn more about Rick’s Cabaret International Inc. at Bloomberg

Despite the modest gains in the markets today, the overall sentiment of the world’s economy and financial woes, continued to weigh heavily on an investor’s conscience. With that, the crude markets reversed their one-day upward trend, to resume their downward trek as the price of oil dropped once again by the close of trading. By the end of trading in the late afternoon, the price for a barrel of light, sweet crude for February delivery slipped $0.99 to settle at $39.03, once again closing below the $40 a barrel mark. In additional NYMEX trading, gasoline futures added $0.008 to $0.8745 a gallon, while heating oil was relatively flat at $1.2853 a gallon. Natural gas for February delivery was lower by $0.225 at $5.86 per 1,000 cubic feet.

In light bond trading, treasuries concluded the day higher, as investors remained cautious about the continuing tensions in Gaza and the decline in the price of crude. At the close of trade, the benchmark 10-year note added 4/32 to 114 23/32 as its yield dropped to 2.08%, up from yesterday’s 2.10%. Meanwhile, the 30-year note advanced by 1 10/32 to 139 10/32 as its yield slipped to 2.58%. Finally, the 2-year note increased by 3/32 to 100 9/32 as its yield fell from Monday’s 0.79% to 0.75%.

In currency trading, the U.S. Dollar traded mixed against the major European paper, while falling against the major Asian currency. By late afternoon, the 15-nation Euro advanced against the greenback, buying $1.4156, up from last night’s price of 1.4091. Versus the British pound, the Dollar managed to gain in value as the pound slipped to $1.4471, down from yesterday’s $1.4555. However, against the Japanese yen, the Dollar slipped as well, buying 90.29, down from Monday’s price of 90.33, but managed to gain against the Swiss franc, buying 1.0560, up from 1.0518 the day before.

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