US Market tries to stay steady
A strong dollar and lower commodity prices continued to be the main
highlights for the US Market for the week ended on Friday, 15 August.
Though there were plenty of economic news across the globe, the ones in
US were mixed in nature. Though the market kicked off the week on a
stronger note, it registered losses on almost all the other days. It
was only the technology sector that relatively stayed strong and helped
Nasdaq gain for the week. It was the financial sector that was this
week's worst sector performer. It fell on festering concerns about
credit market conditions
The Dow Jones Industrial Average gained
lost 74 for the week to end at 11,659.9. Tech - heavy Nasdaq gained
38.42 points at 2,452.52. S&P 500 gained 1.88 points to end at
1,298.2.
In the financial sector, UBS reported its fourth
straight quarterly loss and said that it is separating its business
divisions into three independent units. Wachovia reported a wider
second quarter net loss in its SEC filing than was first reported.
Goldman Sachs had its earnings estimates cut by influential Oppenheimer
analyst. Morgan Stanley said it is going to repurchase $4.5 billion in
auction rate securities and the list goes on.
On Wednesday, 13
August, Bank of America dragged the market down by tumbling 7% after
reports hit the wires that several states are suing Countrywide
Financial, which the banking giant recently acquired, over
Countrywide's lending practices. In addition to this, Merrill Lynch
downgraded several firms to Underperform, the main among them being
Goldman Sachs, Morgan Stanley and Lehman Brothers. Lehman Brothers also
had its earnings estimates cut at Deutsche Bank.
In the US
stock market on Friday, 15 August, stocks concluded in mixed fashion as
results were mixed across the major indices. Participants initially
pushed the major indices higher as several retailers provided
better-than-expected earnings per share results and a strong dollar
helped undercut commodity prices further. Yet the sense of bullishness
during the early going waned in afternoon trade as retailers lacked the
strength to help the broader market and no market-moving leader emerged.
The Dow Jones industrial Average ended the day with a gain of 44 points
at 11,659. The Nasdaq Composite Index, finished lower by 1.15 points at
2,452.52. S&P 500 finished higher 5.27 points at 1,298.2.
The economic data seen during the week were mixed. Industrial
production rose 0.2% in July, but it was the trade deficit for June
that brought particularly good news in terms of GDP calculations. It
was reported that the real trade deficit, which is price adjusted,
improved to $39.1 billion from $43.1 billion in May. The reduced
deficit should lead to an upward revision for second quarter GDP and
implies trade will once again provide a strong boost to third quarter
GDP.
The encouraging trade report was offset to an extent by a
disappointing report that retail sales declined 0.1% in July. Excluding
autos, they were up 0.4%. Overall, the retail sales report was on the
soft side. Also, the weekly initial claims report did the same, as the
4-week moving average increased 19K to 440,500.
Separately, the
consumer price index for July didn't bring good inflation news. Both
headline and core-CPI, which excludes food and energy, were higher than
expected. On a year-over-year basis, total CPI was up 5.6% -- the
highest rate of increase since 1991 -- while core CPI was up 2.5%.
Several retailers, including Wal-Mart, Kohl's, J.C. Penney and
Nordstrom posted better-than-expected second quarter earnings results,
yet most expressed some caution about the outlook for the third quarter
and/or full year.
Crude-oil futures for light sweet crude for
September delivery closed at $113.77/barrel (lower by 1.24 or 1.1%) on
the New York Mercantile Exchange. For the week, crude prices ended
lower by 1.2%.
In a monthly oil report issued on Friday, the
Organization of the Petroleum Exporting Countries (OPEC) said that oil
demand has been badly hurt this summer by the slowing economy and high
oil prices. Transport and industrial fuels declined the most, sending
USA?s total oil demand down by 3.8%, or 0.8 million barrels per day in
the first seven months of the year.
Visit our site at – http://investorline.co.in/
Newsromm - http://newsroom.investorline.co.in/
Learning Center- http://learning.investorline.co.in/
Mutual funds - http://mutualfunds.investorline.co.in/
Life Insurance - http://insurance.investorline.co.in/
Investor Journal - http://research.investorline.co.in/
Latest News - http://investorline.co.in/blogger/?q=aggregator/categories/1
News Resources - http://investorline.co.in/blogger/?q=aggregator/sources
Newscatcher- http://catcher.investorline.co.in/
Newsgroups- http://groups.google.com/group/india-investor
0 comments:
Post a Comment