Stock Star New Year With Gains

NEW YORK (CNNMoney.com) -- Stocks inched higher Friday morning as investors said good riddance to one of the worst years on record - but showed caution on the first trading day of the new year.

The Dow Jones industrial average (INDU) rose 0.4% in the early going. The Standard & Poor's 500 (SPX) index gained 0.3%. The Nasdaq composite (COMP) inched higher.

Tim Crimmins, senior equity trader at Lord Abbett, said that "optimism for '09" could help drive the futures market. But he also said that volume will be light in the Friday session, considering that it's sandwiched between New Year's Day and the weekend.

"Today is just going to be a quiet day," he said.

The markets are looking to put aside one of the worst years in Wall Street's history. Last year, the Dow Jones industrial average fell 34%, the Standard & Poor's 500 index lost 39% and the Nasdaq composite index slid 41%.

The first trading session in 2009 comes on the heels of a rally that happened on the last day of trading in 2008. In that Wednesday session, the Dow Jones, the S&P 500 and the Nasdaq all gained more than 1%.

All financial markets were closed Thursday for New Year's Day.

Markets: Asian stocks started the year mostly higher, with Hong Kong's Hang Seng index finishing the day 4.6% higher. Tokyo was closed for an extended holiday. In Europe, markets were up in early trading.

Oil slipped 2%, giving back some of the gains in a 14% New Year's Eve surge. U.S. light crude fell 76 cents to $43.84 a barrel on the New York Mercantile Exchange. The U.S. dollar gained versus major international currencies, including the euro, yen and British pound.

Economy: On the agenda Friday is the Institute for Supply Management's monthly report on manufacturing, to be released at 10 a.m. ET. Economists surveyed by Briefing.com expect further contraction in the sector, reflecting a recessionary environment, with the index dipping to 35.4 in December from 36.2 in November.

Companies: Time Warner Cable (TWC) and Viacom (VIA.B) were finalizing details on an agreement that will allow TWC customers to continue to watch programming on Viacom's MTV Networks, which include Nickelodeon and Comedy Central.

A source close to the negotiations told CNN that TWC is expected to agree to pay a modest increase in fees to Viacom in the new deal.

Time Warner (TWX, Fortune 500), the parent company of Time Warner Cable and CNNMoney.com, rose 30 cents to $10.10 a share Friday morning, while Viacom (VIA.B)'s more activity traded stock class was up 46 cents to $19.52.

The End of Libertarianism

A source of mild entertainment amid the financial carnage has been watching libertarians scurrying to explain how the global financial crisis is the result of too much government intervention rather than too little. One line of argument casts as villain the Community Reinvestment Act, which prevents banks from "redlining" minority neighborhoods as not creditworthy. Another theory blames Fannie Mae and Freddie Mac for causing the trouble by subsidizing and securitizing mortgages with an implicit government guarantee. An alternative thesis is that past bailouts encouraged investors to behave recklessly in anticipation of a taxpayer rescue.

There are rebuttals to these claims and rejoinders to the rebuttals. But to summarize, the libertarian apologetics fall wildly short of providing any convincing explanation for what went wrong. The argument as a whole is reminiscent of wearying dorm-room debates that took place circa 1989 about whether the fall of the Soviet bloc demonstrated the failure of communism. Academic Marxists were never going to be convinced that anything that happened in the real world could invalidate their belief system. Utopians of the right, libertarians are just as convinced that their ideas have yet to be tried, and that they would work beautifully if we could only just have a do-over of human history. Like all true ideologues, they find a way to interpret mounting evidence of error as proof that they were right all along.

To which the rest of us can only respond, Haven't you people done enough harm already? We have narrowly avoided a global depression and are mercifully pointed toward merely the worst recession in a long while. This is thanks to a global economic meltdown made possible by libertarian ideas. I don't have much patience with the notion that trying to figure out how we got into this mess is somehow unacceptably vicious and pointless—Sarah Palin's view of global warming. As with any failure, inquest is central to improvement. And any competent forensic work has to put the libertarian theory of self-regulating financial markets at the scene of the crime.

By: Jacob Weisberg