Friday, October 5, 2007

US stocks end with modest gains; Employment data awaited

US stocks on Thursday finished with modest gains after lingering on either side of unchanged for much of the day, with investors reluctant to make big moves ahead of Friday's employment report, which could determine whether the Federal Reserve again cuts interest rates at the end of October. The Commerce Department said new orders for U.S.-made factory goods dropped 3.3% in August, the biggest decline in seven months, and greater than the 2.6% drop forecast by analysts.

After opening higher, stocks fell in the face of a larger-than-anticipated drop in factory orders and a modest rise in jobless claims, then turned mixed in afternoon action before finishing in positive territory. Investors now await the government's September employment report, hoping it will strike a balance between steady growth and more room for interest rate cuts.

Wall Street appears optimistic that the Labor Department report will indicate a rebound from August and include revisions to that month's dismal numbers. August's job creation report showed a decline in payrolls when economists had predicted a rise, and sent the Dow Jones industrial average down nearly 250 points the day it was released. Since then, the Federal Reserve has lowered a key interest rate and the Dow quickly bounced back to where it was in mid-July, before the credit markets tightened up and caused stocks to fall sharply.

Friday's report is important because this year's relatively stable job market has been an important prop for the U.S. economy, helping to offset the housing slump and sluggish growth.

The Dow rose 6.26, or 0.04%, to 13,974.31, after shooting to a record high Monday and then giving back a large chunk of its gains Tuesday and Wednesday. Broader stock indicators were also little changed on the day, which was notable for its low volume and muted volatility. The Standard & Poor's 500 index rose 3.25, or 0.21%, to 1,542.84, and the Nasdaq composite index advanced 4.14, or 0.15%, to 2,733.57.

Bonds rose as the markets awaited the employment report. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell to 4.53% from 4.55% late Wednesday.

On the New York Stock Exchange, 1.1 billion shares were exchanged, with advancing stocks outpacing decliners 5 to 3. Volume on the Nasdaq topped 1.1 billion shares, and advancers outran declining stocks 4 to 3.
Sectors making early gains included financial, telecommunications and health care, while those on the decline included technology, materials and energy.


Major Indian ADRs end high; Tata Motors, Wipro among gainers

Major Indian ADRs managed to post some marginal gains. The only losers were ICICI Bank and Sterlite. In the technology pack, Infosys Technologies was up 0.83% at $ 51.05, Patni Computers was up 1.05% at $ 23.03, Satyam Computers was up 0.98% at $ 26.91, while Wipro ended the day 1.57% higher at $ 14.89.

In the non-technology pack, HDFC Bank was up 0.9% at $ 106.81, VSNL was up 0.43% at $ 23.10, ICICI Bank was down 1.17% at $ 53.40, MTNL was up 1.9% at $ 8.05, Tata Motors was up 1.7% at $ 19.74, Dr Reddy's Lab was up 1.44% at $ 16.88 and Sterlite was down 0.83% at $ 19.20.

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