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US Market in cautious mode

Wednesday, October 31, 2007

US stocks were in cautious mode today, Tuesday, 30 October 2007, a day ahead of Federal Reserve’s crucial decision on interest rate. Indices closed lower today. But investors still hope that Federal Reserve is going to give them another treat by cutting the interest rate by another half percentage point. But some hope that it might just be a quarter percentage point. Nine of the ten economic sectors posted loss. Crude prices slipped today and closed a little above $90/barrel.

The Dow Jones industrial Average closed lower by 77 points at 13,792. The Nasdaq Composite Index, finished marginally lower at 2,816. S&P 500 finished lower by 9.96 points at 1,531.

Twenty out of thirty Dow components ended in red today. P&G was the main Dow loser. Technology remained today’s focus and Microsoft remained one of the few winners today.

A weaker than expected consumer confidence report for October from the Conference Board was the main reason behind today’s sell-off. The Conference Board's reading on consumer confidence fell to 95.6 for October from 99.8 in September, amid record oil prices and persisting weakness in the housing market. This was against a consensus estimate which called for an increase to 99 or 100.

On the earnings front, P&G missed on meeting Wall Street estimates. The stock witnessed a huge sell-off today and the stock closed lower by 4%.

While Energy sector followed by Materials were the hardest hit today, Technology tried to provide the required support. Apple stocks were up more than 1% on news of its good sales of Leopard Operating System since its launch. Microsoft shares too got a good boost.

All Indian ADRs end in red

All Indian ADRs closed in red today. VSNL and Tata Motors led the decliners slipping by 5.07% and 4.8% respectively. ICICI Bank and HDFC Bank dropped by 3.5% and 1.5% respectively.

After marking record highs since the past couple of days, crude oil prices slipped today drastically and was back at the $90/barrel level. Prices slipped due to a number of reasons. Traders speculated that this week’s energy inventory report is expected to show rise in US crude inventories. Expected resumption in production at Petroleos Mexicanos also helped in easing prices. Top of it, there were reports that Goldman Sachs has urged investors to take profits.

Crude-oil futures for light sweet crude for December delivery closed at $90.38/barrel (lower by $3.15/barrel or 3.4%) on the New York Mercantile Exchange. Prices rose to $93.8/barrel today earlier in the day during intraday trading. Prices are up 48% on a yearly basis. Futures prices for petroleum products also fell today, but natural gas bucked the trend.

Volume on the New York Stock Exchange came to 1.2 billion, with declining stocks topping those advancing roughly 5 to 3. On the Nasdaq, volume neared 2.2 billion, and decliners beat advancing issues 9 to 5.

Tomorrow’s focus will be on the Federal Reserve's interest rate decision at 2:15 ET together with a host of earning reports.

Posted by FR at 5:51 PM  

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Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it.& take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations given in this blog.