US Market continued with its streak of losses today, Monday, 10 March, 2008. The day started with a negative sentiment and the same continued for the entire day. Financial sector led the days nervousness as traders kept on speculating about Federal Reserves next move. Crude oil crossing the $108/barrel spurred further negative sentiment. All ten of the major economic sectors finished in negative territory.
The Dow Jones industrial Average ended the day with a loss of 153 points at 11,740. The Nasdaq Composite Index, finished lower by 31 points at 2,181. S&P 500 finished lower by 17 points at 1,267. Twenty-six out of thirty Dow stocks ended in the red today led by Citigroup and JP Morgan. Citigroup shares slid by almost 6%. Other financial stocks like American Express, JP Morgan dropped by 3-4%.
The main economic report of the day was the January Wholesale Inventories reading. Inventories rose 0.8%, which was slight better than the expected rise of 0.5%.
The negative momentum in the finance sector was spurred by the fact that Citigroup cut its earnings estimates on a number of investment banks as the company expects $9 billion more mark-to-market write-downs from several major U.S. firms.
There were a spate of other pessimistic news in the finance sector. Reports indicated that Lehman Brothers will be laying off 5% of its workforce. Also, there were plenty of negative rumors that a major Wall Street firm was facing liquidity issues. In addition, Fitch Ratings took negative ratings action on eight banks, including Washington Mutual.
Countrywide Financials stock dropped 12% in the wake of a weekend report that the firm is being investigated by the Federal Bureau of Investigation over possible securities fraud.
Mc Donalds was one of the Dow components that was up today by almost 3.5%, after the world's largest fast-food chain reported same-store sales climbed 11.7% in February from a year ago.
All Indian ADRs ended in red today. ICICI Bank and Wipro Technologies led the group of decliners, with the ADRs dropping more than 4% each.
Crude prices shot up once again today after the dollar remained under pressure against its rival currencies. Since last week, prices have been consistently trading above $100 after the dollar dropped to three-year lows against the yen as a sell-off on Wall Street sapped investor appetite for risk. Energy prices have surged over the past year as the dollar plunged, prompting investors to seek a hedge against inflation.
Crude-oil futures for light sweet crude for April delivery today closed at $107.9/barrel (higher by $2.75/barrel or 2.6%) on the New York Mercantile Exchange. They earlier surged to $108.21 a barrel, the highest since trading began in 1983. Last week, crude prices ended higher by $3.31 (3.3%).
Volume on the New York Stock Exchange topped 1.6 billion, and declining stocks outran those advancing 5 to 1. On the Nasdaq, 962 million shares were exchanged, and decliners outdid declining issues about 3 to 1.
For tomorrow, The International Trade Balance for January is expected to garner much attention as it offers insight into net exports and imports as they contribute or detract from economic growth.
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