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US Market struggles to retain gains

Friday, October 19, 2007

Poor earning report from Bank of America weighs on overall market sentiment

A disappointing earnings report from Bank of America and higher crude prices weighed on the US stocks today, Thursday, 18 October, 2007 and stocks struggled in the throughout the day to hold on to their gains. At the end, indices closed mixed once again today, with Nasdaq being the only one ending in green. Six out of ten economic sectors posted gains today.

The Dow Jones industrial Average closed lower by 3.58 points at 13,888.96. The Nasdaq Composite Index, finished higher by 6.64 points at 2,799.31. S&P 500 finished lower by 1.16 points at 1,540.08. Seventeen out of thirty Dow stocks ended in red with American Express heading the list of Dow laggards.

Bank of America was a big drag on the stock market today after the company reported that third quarter profit plunged 32%. The stock overall impacted the financial sector and the sector remained in negative territory for most part of the day. Bank of America's third quarter earnings declined due to the significant disruption in the financial markets during the quarter.

Among other major earnings reports, Pfizer topped Wall Street’s expectations though earnings were lower for the quarter.

Crude kisses the $89 mark too

Crude oil futures closed above $89/barel today for the first time ever. Prices soared as dollar hit a new all time low against euro. It also fell against other rival currencies. Barring yesterday, prices rose since early this week on fresh tensions between Turkey and Iraq.

Crude-oil futures for light sweet crude for November delivery closed at $89.47/barrel (higher by $2.07/barrel or 2.4%) on the New York Mercantile Exchange. Futures reached $89.78 during intra day trading. Prices are 55% higher on a y-o-y basis.

On the economic front, new claims for unemployment for the week ended October 13 rose to 337,000 from 309,000 the week before. Leading indicators for September rose 0.3%, which was in-line with economists' expectations.

Indian ADRs closed mixed today. MTNL, Wipro Tech, Infosys and VSNL were gainers. HDFC Bank and ICICI Bank shed 0.43% and 1.32% respectively.

On the New York Stock Exchange, volume hit 1.3 billion shares, and declining stocks ran just ahead of advancing issues. More than 2 billion shares traded hands on the Nasdaq, where decliners also barely edged out advancers.

For tomorrow, investors will look for corporate financials to help set the tone of trading for the day. Four Dow components are slated to come out with their reports before market opens – Mc Donalds, Caterpillar, 3M and Honeywell.

Posted by FR at 6:18 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.