Tuesday, April 22, 2008

US Market ends mixed as financials drag

An earning disappointment from Banc of America took US market lower today, Monday, 21 April, 2008. Oil prices reaching a all time high also led to some negative sentiments in the market. Technology was the only shining spot in today`s market. Five of the ten economic sectors finished in negative territory. The underperforming sectors included financials, healthcare, consumer discretionary, industrials, and utilities.

A larger than expected decline in profits at Bank of America was the main driving force behind today`s negative sentiment. In other earning reports, Merck beat estimates while Eli Lilly reported earnings that fell short of estimates.

The market traded in red for almost entire day. Dow was down by almost 91 points at one point. At the end, The Dow Jones industrial Average ended with a loss of 24 points at 12,824.35. The Nasdaq Composite Index, finished higher by 5 points at 2,408. S&P 500 finished lower by 2.1 points at 1,388.

Sixteen out of thirty Dow components ended in the red today. Bank of America and Caterpillar were the main Dow laggards today. General Motors was one of the main Dow winners.

Strength in technology sector helped offset weakness in the financial sector. Apple stock rose strongly today after RBC Capital Markets raised its price target on shares of Apple. The other sector that came to market`s rescue today was the energy sector.

Crude prices reached new highs today due to supply related concerns and also as the dollar fell to new lows. Crude-oil futures for light sweet crude for May delivery closed at $117.48/barrel (higher by $0.79/barrel or 0.7%) on the New York Mercantile Exchange. Prices touched $117.83/barrel during intra day trading. Crude prices are 6.2% higher last week and 85% higher on a yearly basis. For the year, crude is up by 20.7% till date.

In the currency market today, the dollar extended losses against most major counterparts, after Bank of America`s earnings shortfall reminded investors that the U.S. financial sector is not out of the woods yet. The dollar index, which tracks the greenback`s performance against a basket of other major counterparts, edged down 0.2% to 71.79. The dollar also fell to within a cent of a record low against the euro after European Central Bank officials reiterated concern inflation is accelerating, increasing chances interest rates will stay at a six-year high.

Volume on the New York Stock Exchange topped 3.3 billion, and for every seven stocks on the rise roughly nine declined. On the Nasdaq, more than 1.6 billion shares were exchanged, and decliners outdid advancers 5 to 4.

AT&T and McDonald`s are to report their earnings prior to the tomorrow`s open. Tuesday is light in terms of economic data. The day`s primary economic release is March`s Existing Home Sales data.

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