US Market registers modest gains
In the US stock market on Monday, 11 August, the stock market posted a
solid gain with notable strength in financials and retailers. The end
result was not as strong as it could have been, however, as the stock
market gave up half its advance in afternoon trade as crude prices
recovered some losses and the Fed said that lending standards have
tightened. The stock market inversely tracked oil price movements for
most of the session, as there was very little corporate news and no
economic data to focus on.
The Dow Jones industrial Average
ended the day with a modest gain of 48 points at 11,782. The Nasdaq
Composite Index, finished higher by 25.8 points at 2,439.95. S&P
500 finished higher by 9 points at 1,305. The Nasdaq is outperforming,
partially due to strength in Amazon.com.
According to the
Fed's latest survey, domestic financial institutions tightened their
lending stands on all major loan categories over the past three months.
Specifically, 75% of domestic respondents tightened requirements for
lending standards on prime mortgages, which is up from the previous
survey's reading of 60%.
Amazon.com shares soared 9.4% today
after Citi said that sales of Amazon's electronic book reader, Kindle,
appear to be much stronger than expected.
In terms if
corporate news in Wall Street, Waste Management raised its offer to
purchase Republic Services to $37 per share, or $6.73 billion, from $34
per share. This represents a 33% premium to Republic's share price
prior to Waste Management's original proposal. Republic said it will
review the offer.
In commodity trading, a strong dollar and
overall economic concerns related to the US economy pushed crude prices
below the $115/barrel level for the first time in three months. Prices
rose above $116 earlier during the day as five days of clashes between
Russia and Georgia threatened alternative export routes from
Azerbaijan, needed because of a pipeline fire. Crude-oil futures for
light sweet crude for September delivery closed at $115.2/barrel (lower
by 4.82 or 4.4%) on the New York Mercantile Exchange. Futures earlier
fell to an intraday low of $112.72 a barrel.
At the currency
markets on Monday, the dollar extended its last week rally against the
euro. The dollar index which measures the U.S. dollar against a basket
of major currencies, rose to 76.25, up from 75.82 in during last
Friday. A combination of factors drove the dollar's rise last week,
such as the European Central Bank admitting weakness in the euro-zone
economy. The dollar also gained on speculation the economic slowdown
that started in the U.S. is spreading.
Trading volumes showed
1.4 billion shares trading on the New York Stock Exchange and 757
million trading on the Nasdaq stock market. Gainers topped decliners by
a margin of 3 to 1 on the NYSE and 2 to 1 on the Nasdaq.
For
tomorrow, the economic calendar features the June international trade
balance data. The Treasury Budget for July is also due tomorrow; it is
scheduled for afternoon release.
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