US Market once again closed mixed but lower today, Tuesday, 04 March, 2008 but it was Nasdaq that posted gains today. Federal Reserve Chairman, Ben Bernankes comments about more home foreclosures in the coming days took some steam out of the market initially in the day. But then, in the last hour of trading some optimistic news related to a bail out of bond insurer Ambac Financial, helped market win back much of its days losses. At the end, six out of ten sectors ended in the red today.
Separately, there were negative news from the Intel and Citigroup. But they were partly offset by somewhat optimistic comments from Cisco Systems chairman. Dow was down by almost 200 points at one point in the day. Materials sector posted the steepest loss today.
At the end, The Dow Jones industrial Average ended the day with a loss of 45 points at 12,213. The Nasdaq Composite Index, finished marginally higher by two points at 2,260. S&P 500 finished lower by 4.5 points at 1,326. Twenty-three out of thirty Dow stocks ended in the red today led by Intel and Citigroup.
In the morning reports hit the market that Citigroup will need a lot more capital from outside investors than it has already received. Citigroup's stock dropped as much as 8% in the wake of the accusation and weighed heavily on the financial sector.
Also, there was a warning from Intel that it was revising its first quarter gross margin rate guidance downward due to lower than expected NAND flash memory pricing. But on the other side, Cisco Systems CEO said in a presentation that he's even more comfortable with the company's long-term guidance than he was following the last earnings conference call.
But getting battered was the financial sector when Fed Chairman Bernanke told the Independent Community Bankers of America that defaults and foreclosures in the housing market were likely to continue to increase. To help stem preventable foreclosures, the Fed Chairman suggested banks consider writing down the principal amount on mortgage loans as a means of restoring equity for borrowers.
But market then staged a late recovery after Ambac shares rallied almost 9% after reports of a capital infusion of the bond insurer could be announced as early tomorrow.
Crude prices fell by almost $3 today and closed at lower that $100/barrel after staying above the same for four straight days. Prices dropped today as OPEC officials hinted that it will keep production quotas unchanged at its next weeks meeting. Prices also fell as traders speculated that tomorrows weekly inventory report by the Energy Department will show a eighth weekly rise in crude inventories.
Crude-oil futures for light sweet crude for April delivery today closed at $99.52/barrel (lower by $2.93/barrel or 2.9%) on the New York Mercantile Exchange. Prices are 65% higher than a year ago. It traded within a range of $103.3 and $98.87 today.
Volume on the New York Stock Exchange neared 1.7 billion and decliners outran advancing stocks more than 2 to 1. On the Nasdaq, 1.2 billion shares traded hands, and declining stocks topped those advancing nearly 3 to 2.
Tomorrow there are economic reports on the dock. Revised fourth quarter Productivity and Cost data are scheduled for release tomorrow morning followed by February's Factory Orders and ISM Services Index. The Energy Information Administration's weekly crude inventory report is also due after trading opens.
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