US Market erases earlier losses
US Market gave up earlier losses and finally closed modestly higher for the day today, Thursday, 13 March, 2008. Positive comments from a major credit ratings firm managed to lift the market. Dow was down as much as 230 points earlier in the day. The dollar continued to weaken and gold crossed the $1,000 mark. Crude price remained relatively steady. Commerce Department came out with a weak economic report. But at the end, nine of the major economic sectors ended the session in positive territory.
Market got a strong boost after Standard & Poor's said the bulk of write-downs on subprime securities might be behind banks that have already announced their full year 2007 results. S&P said write-downs could reach $285 billion, from the current level of $150 billion. The financial sector saw the largest boost from the S&P report.
The Dow Jones industrial Average ended the day with a gain of 35.5 points at 12,145. The Nasdaq Composite Index, finished higher by 19.7 points at 2,263. S&P 500 finished higher by 6.7 points at 1,315.
Fourteen out of thirty Dow stocks ended in the red today. Though financial sector got a good boost, stocks like Citigroup, AIG, JP Morgan all ended in the red.
But hitting financial stocks earlier in the day was when Treasury Secretary Henry Paulson urged banks to reconsider their dividends to preserve capital.
Barring, Rediff and Satyam Computers, all Indian ADRs ended in red today. The two ADRs ended higher by 3.4% and 3.8% respectively. HDFC Bank and VSNL were the two topmost losers, shedding 3.7% each.
Among bleak economic news today, the Commerce Department reported that consumer spending weakened again in February as U.S. retail sales fell 0.6%. Market expected an increase of 0.2%.
Among other economic data, there were 353,000 unemployment claims for the week ended 8 March. his was unchanged from the previous reading.
Crude prices shot up once again today. Prices rose after the dollar continued to remain under pressure today after weak economic data. But prices rose despite the EIA yesterday reporting a surprising increase in weekly crude inventory for week ending on Friday, 7 March, 2008. Crude-oil futures for light sweet crude for April delivery today closed at $110.32/barrel (higher by $0.41/barrel or 0.4%) on the New York Mercantile Exchange. They earlier surged to $111 a barrel, the highest since trading began in 1983.
On the New York Stock Exchange, trading volumes showed 1.8 billion shares changing hands, with gainers topping decliners by a ratio of 18 to 13. On the Nasdaq, 1.1 billion shares traded, with gainers topping decliners by 17 to 11.
Tomorrow, Fed Chairman Ben Bernanke is scheduled to speak about sustainable homeownership in Washington. In terms of economic data, February's Consumer Price Index is due prior to the opening bell followed by University of Michigan's preliminary Consumer Sentiment Survey.
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