US Market reverses direction and ends higher
US Market witnessed a rollercoaster ride but ultimately closed modestly higher for the day today, Wednesday, 20 February 2008. The day started on a pessimistic note with indices sliding down after a couple of weak economic reports. But in the second half, few comments from Fed chief shelved the concerns and the market turned upward to finish the day in positive ground.
Earlier in the day, the government reported that U.S. consumer prices rose a seasonally adjusted 0.4% last month. The core consumer-price index, which excludes food and energy costs, climbed 0.3% in January, its biggest jump since June 2006. Among other reports, January housing starts and building permits were roughly in-line with estimates.
Then in the afternoon session, the Federal Open Market Committee meeting minutes were out. Federal Reserve Chairman said that Fed is quite ready to ease interest rates further to help US economy find a solid footing. Fed raised its core inflation forecast for 2008 to 2.0% to 2.2% from 1.7% to 1.9%. The Fed also cut its 2008 GDP forecast to 1.3% to 2.0% from 1.8% to 2.5%.
After being down by almost 75 points earlier in the day, market made a U-turn and the Dow Jones industrial Average ended the day with a gain of 90 points at 12,427. The NASDAQ Composite Index finished higher by 21 points at 2,327. S&P 500 finished higher by 11 points at 1,360.
Twenty-three of thirty Dow stocks ended in the green today. H-P was the main Dow winner today. Verizon and AT&T continued to lead the group of Dow laggards even today.
Crude prices ended once again higher. Prices rose today after comments from Federal Reserve Chairmans that Fed is quite ready to ease interest rates further to help US economy find a solid footing. Oil also rose after the U.S. dollar fell enhancing the appeal of commodities as an inflation hedge. Crude-oil futures for light sweet crude for March delivery today closed at $100.74/barrel (higher by $0.73/barrel or 0.7%) on the New York Mercantile Exchange. Earlier in the session, the March contract, which expired today, hit a record all-time high of $101.32 a barrel.
Tomorrow's economic reports include Weekly jobless claims followed by January's Leading Economic Indicators. Philadelphia Fed Survey and Energy Information Administrations weekly oil and gas inventory report will follow them.
Source- Capital Market
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