US Market registers good gains
Stocks at Wall Street ended modestly higher on Wednesday, 20 August,
2008. Financial sector registered modest gains despite Freddie Mac and
Fannie Mae slipping by another 20%. A better than expected earning
report by H-P and modest rise in crude prices helped stocks register
good gains after quite a long time. Eight of the ten sectors ended in
the red today.
The Dow Jones industrial Average ended the day
with a gain of 68.88 points at 11,417.43. The Nasdaq Composite Index,
finished higher by 4.72 points at 2,389.08. S&P 500 finished higher
by 7.85 points at 1,274.54.
Seventeen of thirty Dow components ended in the green today led by AIG, Bank of America, Citigroup and American Express.
Among earning news, H-P, a blue-chip stock, rose 5.6% after the company
posted an 11% rise in profit and issued an earnings outlook that topped
analyst estimates. This gave the market a strong start but the indices
soon slipped into the red as crude prices rose before the inventory
report was out. But then, crude prices slipped again once the inventory
data hit the wires and the indices popped up in the green again.
The financials sector continued to be under pressure even today after
Fannie Mae and Freddie Mac reports that they will need to be bailed out
by the federal government. But still the financial sector managed to
dodge these reports by ending in the green today.
The Wall
Street Journal reported today that Freddie executives will meet with
Treasury officials, saying the two sides may explore whether the
Treasury could clarify its intentions in a way that would reassure
investors.
Indian ADRs ended mixed today. HDFC Bank and ICICI Bank were the topmost gainers soaring 3.7% and 3.9% respectively.
Crude oil prices were quite volatile and rose today at Nymex. Prices
rose higher earlier during the day. But they gave up most of their
gains once the weekly inventory report by the Energy Department hit the
wires. At the end, prices closed modestly higher. Crude-oil futures for
light sweet crude for September delivery closed at $114.98/barrel
(higher by $0.45 or 0.4%) on the New York Mercantile Exchange.
As per the weekly report issued by the Energy Information
Administration (EIA) wing of the Energy Department, crude supplies rose
by 9.4 million barrels to 305.9 million for the week ended 15 August,
2008. Market was expecting a build up of just 1 million barrels. It was
the highest weekly buildup of crude in almost seven years. Refinery
utilization was at 85.7% compared with 85.9% of capacity a week earlier.
At the currency markets on Wednesday, the dollar gained as much as 0.7%
against the euro after losing almost that amount in the previous two
days. Worries about growth outside the U.S. allowed the dollar to
rebound on Wednesday, sending the euro back toward six-month lows
against the greenback and lifting the U.S. unit against most major
counterparts. The dollar index, which measures the greenback against a
trade-weighted basket of currencies, rose to 76.92 from 76.746 in the
previous day.
Trading volumes remained light with 1 billion
shares changing hands on the New York Stock Exchange and 710 million
trading on the Nasdaq stock market. Gaining issues topped decliners 16
to 15 on the NYSE, while decliners topped gainers 14 to 13 on the
Nasdaq.
For tomorrow, other than a couple of earning reports,
weekly jobless claims are due before Thursday's opening bell. July
leading economic indicators and the August Philadelphia Fed Index are
both due later in the morning.
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