Mixed finish for US Market
In the US stock market on Tuesday, 26 August, US stocks ended mixed
with the technology sector playing the spoilsport. Energy sector tried
providing some leadership as crude prices increased. Better than
expected economic reports also had some positive effect on overall
market sentiment. Market opened in the red in the morning. But trading
volume was the lowest for the year till date. Nevertheless, Dow and
S&P 500 managed to register marginal gains. Seven of the ten
sectors registered gains.
The Dow Jones industrial Average
ended the day with a gain of 26.6 points at 11,412.87. The Nasdaq
Composite Index, finished lower by 3.6 points at 2,361.9. S&P 500
finished higher by 4.6 points at 1,274.51.
Eighteen out of
thirty Dow stocks ended in the green today. AIG and other energy stocks
led the Dow winners today. The day was quite heavy on economic reports,
couple of which was better than expected.
The Federal Open
Market Committee (FOMC) minutes for the 5 August, 2008 meeting were
released today. On that day, the FOMC had kept the fed funds rate
unchanged at 2%, acknowledging both downside risk to growth and
increased inflation risks. As per today?s meeting, Fed officials are
concerned that inflation won't ease until 2009, but most participants
anticipate moderation in the coming quarters. In general, Fed officials
expect the next policy move will be to raise rates.
Among the
major economic reports hitting the wires today, the Conference Board in
USA reported today that July consumer confidence spiked 9.6% to 56.9
from the previous month. This was much ahead of the expected 2.1%
increase to 53. U.S. consumer confidence registered consecutive month
of gains in August. But the confidence level remained relatively low
amid persistent concerns about jobs. As per the report, the percentage
of consumers saying jobs are hard to get rose to 32% in August from
30.2% in July. Meanwhile, the percentage of consumers expecting
business conditions to worsen over the next six months fell to 25.8%
from 32.4%.
The U.S. Department of Commerce reported today
that July new home sales rose 2.4% to a seasonally adjusted annualized
rate of 515,000 from a downwardly revised June reading of 503,000
against an expected reading reading of 525,000. New home sales were
down 35% from the prior year, but have shown some stabilization in
recent months.
The report also stated that new-home sales are
down 35.3% compared with a year ago. The months' supply of homes on the
market fell to 10.1 months in July from 10.7 months in June. Median
sales prices fell 6.3% in the past year to $230,700.
In a
separate report from the Case-Shiller, it showed that U.S. home prices
fell at a record rate in June. The Case-Shiller index of 20 major
metropolitan areas for the month fell by 15.9% in June 2007. June's
drop represents a new record decline. The report also showed that
annual growth rate slowed in 11 of 20 cities in June.
The Indian
ADRs ended mixed today. Tata Motors and HDFC Bank registered the
largest gains with their ADRs gaining 3.4% and 3.2% respectively.
Trading volume was light, topping 856 million on the New York Stock
Exchange, where advancing stocks outran those declining about 9 to 5.
On the Nasdaq, 591 million shares were exchanged, while advancers
topped decliners 5 to 4.
At the crude market on Tuesday, crude
oil rose more than $1 a barrel on forecasts showing that Hurricane
Gustav may enter the Gulf of Mexico, home to more than a fifth of U.S.
oil production. Crude oil for October delivery rose $1.16 (1%) to
settle at $116.27 a barrel
At the currency markets on Tuesday,
the dollar index, which tracks the value of the dollar against a basket
of other major currencies, climbed 0.6%. The index earlier traded up 1%
on positive economic news at Wall Street.
For tomorrow, the economic reports expected are July Durable Goods Orders and the weekly oil inventory report.
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