A number of disappointing earning reports took US market lower today, Tuesday, 22 April, 2008. Dow plunged by triple digits. An earning disappointment from Banc of America took US market lower today, Monday, 21 April, 2008. Meanwhile, crude oil spiked to lifetime highs. Only energy and telecom finished the day in positive territory. Each of the remaining economic sectors finished with losses.
The technology sector was hammered today after Texas Instrument reported earnings beating expectation but issuing a disappointing outlook. There was another disappointing results coming from UnitedHealth. The company also lowered its full year 2008 earnings guidance. However, Dow components McDonald`s and DuPont topped their earnings estimates, while AT&T met expectations.
The market traded in red for almost entire day. Dow was down by almost 162 points at one point. At the end, The Dow Jones industrial Average ended with a loss of 105 points at 12,720. The Nasdaq Composite Index, finished lower by 31 points at 2,376. S&P 500 finished lower by 12 points at 1,376.
Twenty-three out of thirty Dow components ended in the red today. Du-Pont, AT&T and Mc Donalds were the main Dow laggards today.
Du Pont shares were off 4% after the chemicals company forecast weakness in the U.S. construction and automotive markets to dent growth. On the other hand, McDonald`s said first-quarter profit climbed 24%, but same-store sales in March were slightly negative. The stock ended 1% down today.
The only economic data for the day was March existing home sales data. March existing home sales fell 2.0% to an annualized rate of 4.93 million from the prior reading of 5.03 million. This was slightly better than the expected reading of 4.92 million. Compared to last year, sales are down 19.3%. Prices have fallen 7.7% versus last year.
Crude prices reached another new high today due to supply related concerns and also as the dollar fell to new lows. Lower dollar prompts investors to purchase commodities as an inflation hedge. Crude-oil futures for light sweet crude for May delivery closed at $119.37/barrel (higher by $1.9/barrel or 1.6%) on the New York Mercantile Exchange. Prices touched a high of $119.9/barrel during intra day trading. Crude prices ended 6.2% higher last week and 88% higher on a yearly basis. For the year, crude is up by 22.3% till date. The May contract expires tomorrow and the June contract was up $1.93 to $118.56 a barrel.
In the currency market today, the dollar sank to a new record low against the euro, pressured by surging oil prices and hawkish talk from European Central Bank officials. The dollar index, which tracks the performance of the greenback against a basket of other currencies, fell 0.4% to 71.38.
Volume on the New York Stock Exchange hit 3.8 billion shares, with declining stocks outpacing those on the rise by a more than 2-to-1 count. On the Nasdaq, 1.9 billion shares exchanged hands, with decliners also running ahead of advancing stocks, 3 to 1.
Boeing and UPS are scheduled to report their earnings prior to Wednesday`s open. Tomorrow`s primary economic release is the weekly oil inventory report from the Department of Energy.