US Market registers modest gains
US Market ended the day with decent gains today, Wednesday, 23 July,
2008. It was basically once again a day for earning reports once again
with 110 companies reporting earnings and four among them being Dow
components. In addition, the government announced its weekly energy
statistics and the Fed released its Beige book. Seven of the ten
economic sectors finished with gains. Telecom was the best performing
sector, helped by strength in AT&T. Energy was the worst performing
sector, faltering as crude prices slipped.
The Dow Jones
industrial Average ended the day with a decent gain of 30 points at
11,632.5. The Nasdaq Composite Index, finished higher by 21.9 points at
2,325.88. S&P 500 finished higher by 5.2 points at 1,282.19. The
Nasdaq outperformed its counterparts thanks to strength in large-cap
tech names.
Twenty-one out of thirty Dow stocks ended in the
green today led by AIG and Pfizer. Boeing and MC Donalds were two
laggards for the second straight day.
Earlier in the day,
there was some merger and acquisition. Property and casualty insurance
company Philadelphia Consolidated Holding (PHLY) entered a definitive
agreement to be acquired by Japan-based Tokio Marine Holdings for
$61.50 per share in cash. The offer represents a 73% premium to PHLY's
previous closing price.
Earnings continued to take the centre
stage throughout the day. Pfizer shares gained 3.9% after the world's
largest drug maker reported its second-quarter profit more than doubled.
Also in the earnings arena, AT&T rallied after reporting an 8.6%
rise in earnings per share, which met Wall Street's forecast. There
were some earnings misses as well. Boeing, E*Trade, Washington Mutual
and Yahoo! fell short of estimates. Washington Mutual reported a
larger-than-expected loss of $3.3 billion.
On a negative note,
Costco warned that its earnings per share for its latest quarter will
fall well below the current consensus estimate. Costco cited increased
inflation and especially energy costs.
The financial sector
continued to weigh on market earlier in the day due to the dismal
report from WaMu. But it managed to turn around later in the day on
news that lawmakers reached a deal on a housing bill that, among other
things, will allow for financial aid to Fannie Mae and Freddie Mac if
need be.
The Fed's Beige Book, a collection of anecdotal
economic information, revealed that the US economy has slowed somewhat
since the previous report, and that there were increased price
pressures. In addition, consumer spending was mixed, weak or slowing in
nearly all districts. The release prompted a short but sharp sell-off
in stocks.
All the Indian ADRs ended in the green today. ICICI
Bank and HDFC Bank were the largest gainers with their ADRS soaring
8.6% and 7% respectively.
The weekly inventory report by the
Energy Department and the rebounding dollar pressured crude prices for
the second consecutive day today. Prices also fell after concerns faded
that Hurricane Dolly would pose much of a threat to energy
infrastructure in the Gulf of Mexico. Crude-oil futures for light sweet
crude for September delivery closed at $124.44/barrel (lower by
$3.98/barrel or 3.1%) on the New York Mercantile Exchange. Prices gave
up more than $7 in the past two sessions.
EIA reported in its
weekly inventory report today that U.S. crude inventories fell less
than expected last week and fell 1.6 million in the week ended 18 July.
Market expected a figure around 2 million. At 295.3 million barrels,
U.S. crude-oil inventories are in the lower half of the average range
for this time of year.
Volume on the New York Stock Exchange
topped 1.7 billion shares, with advancers topping decliners nearly 5 to
3. On the Nasdaq, more than 1 billion shares traded, and advancers
outpaced declining stocks 4 to 3.
For tomorrow, earnings
season will continue to dominate. 3M, Bristol-Myers , Dow Chemical,
Ford and Union Pacific are among the more widely held companies due to
announce their latest results. Among economic repots, weekly jobless
claims are due before opening bell Thursday. Existing home sales for
June are due midmorning.
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