US Market rallies for second straight day
US stocks rallied at Wall Street for the second consecutive day today,
Wednesday, 30 July, as investors focused on data that showed an
unexpected gain in nonfarm private payrolls. Also, a word that the Fed
is extending its liquidity measures to Wall Street helped in revoking
buying interest. Crude prices shooting up played no foul in today?s
rally. Nine of the ten sectors ended in the green today led by energy
sector. Healthcare sector was the sole exception.
The market
had opened sharply higher before slumping as the price of oil bounced
back following data that showed national inventories of gasoline fell
last week. The battered financial sector rallied back from earlier
weakness helping indices post good gains for the day. The Dow Jones
industrial Average ended the day with a gain of 186.13 points at
11,583.69. The Nasdaq Composite Index, finished higher by 10.10 points
at 2,329.27. S&P 500 finished higher by 21.06 points at 1,284.26.
Twenty six out of thirty Dow components ended in the green led by Chevron, Exxon Mobil, Alcoa and Walt Disney.
Broad-based buying was largely influenced today by the latest ADP
employment report that showed an unexpected 9,000 increase in July
private nonfarm jobs as against market?s expectation of a 60,000
decrease in jobs.
The stock market got an added boost today on
news that the Fed is extending the length of its Term Securities
Lending Facility program through 30 Jan and is introducing longer terms
to maturity for its Term Auction Facility. The facilities were
implemented to improve liquidity during the recent credit market
turmoil. The Fed's latest move was spurred by continued fragile markets.
Earnings reports were mixed in nature today. While Corning, Garmin and
MetLife disappointed traders, ArcelorMittal and Comcast met
expectations.
Surprisingly, barring VSNl and MTNL, all the
Indian ADRs ended in the red today. Tata Motors and Patni Computers
were the largest losers shedding 4.9% and 4.7% respectively.
Crude prices registered sharp rise in prices today. Prices rose after
Energy Department?s weekly inventory report showed that last week
registered first drop in gasoline inventories in almost five weeks and
also showed a second weekly decline in the crude inventories. Crude-oil
futures for light sweet crude for September delivery closed at
$126.77/barrel (higher by 4.54/barrel or 3.6%) on the New York
Mercantile Exchange. Crude prices had registered drop in the past two
days and yesterday it fell by almost $3. Last week, prices coughed up
$6.5 (4.8%).
At the currency markets on Wednesday, the dollar
rose earlier in the day in foreign-exchange trading after data based on
a sampling of ADP payrolls indicated that July's private-sector
employment rose by 9,000. Including some 20,000 government workers
typically hired in a given month, the ADP index suggests U.S. nonfarm
payrolls rose by about 30,000. But the dollar index which tracks the
performance of the greenback against a basket of other currencies
pulled back a bit as oil prices gained more ground. The index was
settled at 73.29, compared with 73.285 in the previous day.
For tomorrow, along with bunch of earning reports, the spotlight will
focus on the advanced second quarter GDP report and the weekly jobless
claims data.
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