February 12, 2009 (FinancialWire) (By Philip Holmes) -- Stocks finished up on Wednesday as lawmakers moved closer to resolving their differences on a stimulus package that's now worth $789 billion. Investors were also busy untangling some recent moves by Treasury to save the banks. Investors were optimistic that a final version of the stimulus is now approaching completion. As of Wednesday afternoon the bill included around $44 billion in aid to state governments. That was a sticking point for Republicans in the Senate. A measure to provide a $15,000 tax credit for home buyers is currently on the cutting room floor, while President Obama's request that lower income workers receive a payroll tax cut is in the final stages of a compromise. Reactions were mixed, at best, to some new proposals from Treasury Secretary Timothy Geithner to fix the banks. Part of the administration's Financial Stability Plan, the measures would take another stab at building on the legacy of former Treasury Secretary Henry Paulson. Geithner is proposing a "stress test" for banks with over $100 billion in assets to see what really lurks on their balance sheets. The process seeks to determine the big banks' exposure to toxic assets, and to assess what the assets are really worth. As a fix, Treasury would offer to purchase preferred shares and warrants under the Capital Assistance Program, but with stings attached regarding executive compensation. Treasury's Public-Private Investment Fund aims to launch a lending and/or guarantee facility blending private capital with government funds up to $500 billion. As NYU's Nouriel Roubini puts it, "The aim is to involve private capital on a large scale that sits currently on the sidelines while also allowing private market forces to determine the price for currently troubled and illiquid assets." Then there's an expanded TALF, the Federal Reserve Term Asset Backed Securities Loan Facility program, which is, "aimed at unclogging the markets for auto, student and other consumer loans," according to Roubini. TALF, which was previously capped at $200 billion, may expand to $1 trillion, and would also include aid for commercial real estate markets. Critics say that Geithner's latest proposals are too light on specifics and carry more than a whiff of Eau de Paulson in their wake. There is still an underlying assumption that these toxic assets are being undervalued due to a lack of trading and price discovery, and will one day pay off handsomely for the lucky taxpayers of America. There's ample reason for skepticism.

The Investrend Earnings Calendar features APCapital (NASDAQ: ACAP), expected at $1.04; Cephalon (NASDAQ: CEPH), expected at $1.36; Embarq Corp. (NYSE: EQ), expected at $1.25; Life Technologies (NASDAQ: LIFE), expected at $0.53.

The Investrend Economics Calendar lists Retail Sales for January (8:30 a.m.), Weekly Initial Jobless Claims (8:30 a.m.), Business Inventories for December (10 a.m.), Treasury auctions 30-year bonds (1 p.m.).

The Investrend Events Calendar showcases CLDN, UNP, CSX, UPS at BB&T Capital Markets Transportation Services Conference; DLM, DG, BKC, RMK at Goldman Sachs Second Annual Consumer Retail Leveraged Finance Conference; TSRA, KCI, ISRG, BBBB at Deutsche Bank Small and Mid-Cap Growth Conference.

The Investrend Money Index is an indicator of the depth of market direction or indirection. While not always including the same stocks, the NYSE/NASDAQ 50 Most Actives indicate the direction in which the mass of money is flowing. Last session's trading showed 29 advancers versus 19 decliners and two unchanged. Advancers were led by Xl Capital Ltd (NYSE: XL) up 61.38%, Financial Bull 3x (NYSE: FAS) up 10.52%, Morgan Stanley (NYSE: MS) up 10.20%, Citigroup Inc (NYSE: C) up 10.15%, Bk Of America Cp (NYSE: BAC) up 9.17%, Yamana Gold Inc (NYSE: AUY) up 8.97%, Sprint Nxtel Cp (NYSE: S) up 7.80%, Wells Fargo & Co New (NYSE: WFC) up 7.03%, Ultra Financials Pro (NYSE: UYG) up 6.98%. Decliners followed Research In Motion Limited (NASDAQ: RIMM) down 14.51%, Nvidia Corporation (NASDAQ: NVDA) down 12.55%, Dryships Inc. (NASDAQ: DRYS) down 8.48%.

Vote in the Investrend Poll Question of the Day at Investrend Information (http://www.investrendinformation.com).

Investrend Website of the Day: http://www.margaritaville.com/parrothead_week.php

Quote of the Day: "I know a baseball star who wouldn't report the theft of his wife's credit cards because the thief spends less than she does." Joe Garagiola

Today is: Lincoln's Birthday, Georgia Day, National Freedom to Marry Day, Darwin Day, Red Hand Day.

Happy Birthday: John Winthrop, the Younger, Cotton Mather, Abraham Lincoln, Charles Darwin, John L. Lewis, Anna Pavlova, Omar Bradley, R. Buckminster Fuller, Ted Mack, Lorne Greene, Forrest Tucker, Franco Zeffirelli, Arlen Specter, Joe Garagiola, Bill Russell, Judy Blume, Johnny Rutherford, Ray Manzarek, Michael McDonald, Arsenio Hall, Josh Brolin, Christina Ricci.

Today in History: Vasco da Gama set sail in 1502 from Lisbon, Portugal, on his second voyage to India. Santiago, Chile was founded in 1541 by Pedro de Valdivia. Englishman James Oglethorpe founded the 13th United States colony of Georgia, and its first city at Savannah in 1733. The Creek ceded in 1825 the last of their lands in Georgia to the United States government, and migrated west. At New York City's Madison Square Garden in 1879, the first artificial ice rink in North America opened. Former President Abraham Lincoln's birthday was declared in 1892 a national holiday in the United States. The National Association for the Advancement of Colored People (NAACP) was founded in 1909. In Washington, DC, in 1914 the first stone of the Lincoln Memorial is put into place. Calvin Coolidge became in 1924 the first President of the United States to deliver a political speech on radio. A powerful winter in 2006 storm dumped a record 26.9 inches of snow in New York City.

[FirstAlert" was created by Gayle Essary, founder of Investrend Communications, Inc., parent of Investrend Information (http://www.investrendinformation.com). The opinions expressed in FirstAlert" do not necessarily reflect the opinions of Investrend.]

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