Strong gains at US Market
It was basically a day for earning reports today at US Market. A late
surge in the financial sector helped US market register strong gains
today, Tuesday, 22 July, 2008. Financial sector made a weak sector in
the morning after earnings misses from Wachovia and American Express.
But the sector turned around in the final hours of trading. Crude
prices dropping to lowest levels in six weeks also added further
momentum to this rally. Five out of ten sectors ended in the green
today led by financials. But the energy sector was the worst performing
sector.
The Dow Jones industrial Average ended the day with a
good gain of 135.16 points at 11,602.5. The Nasdaq Composite Index,
finished higher by 24.13 points at 2,303.96. S&P 500 finished
higher by 17 points at 1,277.
Twenty-one out of thirty Dow
stocks ended in the green today led by Banc of America, Caterpillar and
Du-Pont. Merck and American Express continued to be two laggards for
the second straight day.
Earlier in the day, Wachovia reported
a larger-than-expected loss of $8.9 billion. The stock fell at the open
but then recovered after investors were encouraged that the company
plans to raise $5 billion in capital using organic measures, instead of
a dilutive capital raise. The stock ended with a gain of 27%.
On the technology front, technology bellwether Apple fell almost 3%
today after the maker of personal computers and iPod music players
offered a weaker-than-expected outlook for its fourth quarter. Also,
Texas Instruments slid 15% after the company reported a 4% profit fall
and offered a disappointing third-quarter outlook.
Bank of
America stock once again closed 13% higher today after the company?s
the result easily topped Wall Street's forecast yesterday due to a
lower-than-expected write-down of $1.2 billion.
On the same front, American Express too disappointed with its earnings and outlook.
Also in the earnings arena, strong emerging market demand helped
Caterpillar increase earnings per share 40% year-over-year, topping
estimates. UPS reported in-line earnings, relieving investors. The
company called the economy bleak, but kept its full year earnings
forecast in-line with expectations.
In the healthcare sector,
Merck reported better-than-expected results for its latest quarter, but
continued concerns over its cholesterol drug Vytorin sent shares
tumbling. United Health reported a 23% drop in earnings per share, but
the results topped expectations.
All the Indian ADRs ended in
the green today. ICICI Bank and HDFC Bank were the largest gainers with
their ADRS soaring 13.1% and 9.9% respectively.
Crude-oil
touched a six-week low today on forecasts that the tropical storm,
Dolly, in the Gulf of Mexico will miss oil fields and refineries,
easing concern about supply disruptions. The rebounding dollar also led
further pressure on crude prices. Crude-oil futures for light sweet
crude for August delivery closed at $127.95/barrel (lower by
$3.09/barrel or 2.3%) on the New York Mercantile Exchange. It slipped
by 5.41% to $125.63 earlier during intra day trading. Crude for August
delivery expired today.
At the currency markets on Tuesday,
the dollar index rebounded after dropping 0.3% yesterday on speculation
borrowing costs may rise later this year. The dollar rose as much as
0.8% against a basket of six major currencies.
Volume on the
New York Stock Exchange neared 1.6 billion shares, and advancers topped
decliners more than 2 to 1. On the Nasdaq, more than 1 billion shares
traded, and advancing issues outpaced those declining, also more than 2
to 1.
For tomorrow, a host of widely-held companies are
scheduled to report their latest earnings results. AT&T, Boeing,
ConocoPhillips, Whirlpool, PepsiCo and GlaxoSmithKline are among the
many. No economic data are scheduled for release tomorrow.
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