18 April 2008
IBM fails to create any stir at US Market
A day after tech bellwether IBM came out with its very encouraging earning report, US Market failed to show any enthusiasm and ended mixed and almost flat today, Thursday, 17 April, 2008. Dow managed to garner minute gains, courtesy to the financial stocks. Merrill Lynch announced write offs and layoffs. Pfizer also disappointed in its earning reports. Still, Dow and S&P 500 ended with marginal gains. Mixed economic data was perhaps the main reason for this. Nasdaq was the only index to end in the red today.
Overall, financials outperformed the other major economic sectors. This was mainly after Citigroups announcement that it will sell CitiCapital, its North American commercial lending and leasing business, to General Electric's GE Capital.
The market traded alternatively in red and green for almost entire day. Dow was down by almost 47 points at one point. At the end, The Dow Jones industrial Average ended with a gain of 1.2 points at 12,620.4. The Nasdaq Composite Index, finished lower by 8.3 points at 2,341.6. S&P 500 finished higher by 0.85 points at 1,365.5.
Seventeen out of thirty Dow components ended in the green today. American Express, JP Morgan and Bank of America were the main Dow winners today. IBM shares too went up by 2%.
After yesterdays close, IBM announced its quarterly earnings beating estimates by a large margin. The company also upped its guidance for the full year. But it seems, market cautiously ignored IBM today.
On the other hand, disappointing announcements came from investment bank Merrill Lynch and pharmaceutical company Pfizer and this led to pessimism among investors. Merrill, announced a loss though it fell short of the consensus earnings estimate. The firm also announced asset backed security write-downs of $1.5 billion and an additional $3 billion in write-downs related to financial guarantees. As for Pfizer, the company reported first quarter earnings which was a nickel short of the consensus estimate.
Among major economic news that hit the wires today, jobless claims for the week ending 12 April totaled 372,000, up from the prior week's revised reading of 355,000. Market expected this week's claims to total 375,000.
Also, The Federal Reserve Bank of Philadelphia's general economic index fell to minus 24.9, the lowest since 2001. Market had forecast a reading of minus 15. A negative number signals a contraction. This led to concerns about the demand for the red metal in the coming months. Separately, leading economic indicators from March showed a +0.1% reading, which was spot on with expectations.
Crude prices closed a little lower today, after touching new high during intra day trading. Price fell after the dollar rebounded against the euro. Crude-oil futures for light sweet crude for May delivery closed at $114.86/barrel (lower by $0.07/barrel or 0.07%) on the New York Mercantile Exchange. Prices touched $115.54/barrel during intra day trading. Crude prices are 4.3% higher this week and 85% higher on a yearly basis. For the year, crude is up by 18% till date.
In the currency market today, the dollar traded higher against most of its major counterparts, though it pared some gains after mixed economic data. The dollar index, which tracks the performance of the greenback against a basket of major currencies, edged up 0.4% to 71.65.
Trading volumes showed 1.2 billion shares exchanging hands on the New York Stock Exchange, where decliners topped gainers 8 to 7. There were 771 million shares trading on the Nasdaq stock market, and decliners there topped gainers by 8 to 5.
Google came out with its earning report after todays close. It is going to dictate tomorrows market momentum. Other than that, Caterpillar, Citigroup and Honeywell are scheduled to report their earnings tomorrow, a day where there are no economic reports on the dock.
0 comments:
Post a Comment