Modest gains at US Market
Strong economic data took US stocks higher today, Wednesday, 27 August,
2008 and all the three indices posted modest gains. Investors found a
reason for economic hope in a July rise in orders for U.S. durable
goods. Crude prices spiked for the third straight day as hurricane
Gustav continued to rattle New Mexico. Trading volume continued to be
substantially light showing no conviction among buyers. Nine of the ten
sectors ended in the green, healthcare being the sole laggard.
The Dow Jones industrial Average ended the day with a gain of 89.6
points at 11,502.51 after being up by almost 132 points at one point.
The Nasdaq Composite Index, finished higher by 20.4 points at 2,382.4.
S&P 500 finished higher by 10.1 points at 1,281.66. Twenty-five out
of thirty Dow stocks ended in the green. Twenty-five out of thirty Dow
stocks ended in the green today.
The Commerce Department at
USA reported today that new orders for U.S. made durable goods (items
designed to last three years or more) surged in July, rising 1.3%. New
orders are very sensitive to economic expectations and serve as useful
leading indicators of growth. Strong transportation equipment demand
boosted the result. Excluding transportation goods, July's new orders
rose 0.7%.
Orders for core capital-equipment goods, considered
the best monthly gauge of business investment, rose 2.6% in July,
following a 1.3% gain in June. Core capital equipment orders exclude
aircraft and non-defense goods. Meanwhile, shipments of these goods,
which are factored directly into the government's calculations of gross
domestic product rose 0.6% in July, following a 0.4% gain in the prior
month.
In a speech today morning at Georgia State University's
business school, Federal Reserve Bank of Atlanta President Dennis
Lockhart predicted inflation would ease in coming months, calling
recent price hikes more likely to be transitory than persistent.
Indian ADRs ended mixed today. Sify was the largest gainer soaring by 18%.
At the crude market on Wednesday, crude-oil climbed as much as 2.9% to
$119.63 a barrel. It was reported today that tropical Storm Gustav will
strengthen as it enters the Gulf of Mexico and might become the
strongest storm since 2005, when hurricanes Katrina and Rita shut
refineries. Finally, crude oil for October delivery increased $1.88
(1.6%) to settle at $118.15 a barrel.
The Energy Department
reported today that crude supplies fell by 100,000 barrels to 305.8
million for the week ended 23 August. Motor gasoline supplies also
fell, down by 1.2 million barrels in the latest week to 195.4 million
barrels. They've fallen a total of 21.7 million barrels in the past
five weeks. As for distillates, inventories remained unchanged for the
week at 132.1 million barrels.
At the currency markets on
Wednesday, the dollar traded lower against the euro. A further spike in
oil prices amid worries over the potential impact of Tropical Storm
Gustav on the Gulf of Mexico triggered profit-taking on the U.S.
dollar. However, the dollar found some ground after the Commerce
Department reported orders for U.S.-made durable goods surged in July.
The dollar index, which tracks the value of the greenback against other
major currencies, slid 0.1%.
Volume on the New York Stock
Exchanged came to a paltry 820.6 million shares, and advancing stocks
outpaced those declining more than 3 to 1. Trade was also light on the
Nasdaq, where 610.5 million issues were exchanged and advancers topped
decliners almost 2 to 1.
For tomorrow, the preliminary GDP
report for the second quarter is scheduled for release before market
opens. The weekly jobless claims report is due simultaneously.
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