A Volatile US Market ends first quarter on a mixed note

A Volatile US Market ends first quarter on a mixed note

Wall Street experiences its worst quarterly performance since past couple of years

It was a volatile market day on Friday but ultimately US Market ended the day in a mixed note after Dow traded in a 174 point range for the day. While the day’s trading marked the end of first quarter of 2007, it was Dow’s worst quarterly performance since Q2 2005. For Nasdaq and S&P 500, it was the worst quarterly performance since Q2 2006. Dow ended the quarter down by 0.9%. Nasdaq and S&P 500 ended the quarter up by 0.3% and 0.2% respectively.

On Friday, after opening on a good note following a couple of good economic reports, the market initially took a sharp downturn after news that the U.S. has imposed trade sanctions on China and as tensions over a stand-off between Iran and the UK kept oil prices near $66 a barrel. But stocks recovered some ground in the final hour of trading as oil fell.

For the day (30 March, Friday) the Dow Jones Industrial Average closed higher by 5.6 points at 12354.35, Nasdaq higher by 3.76 points at 2421.64 but S&P 500 lower by 1.67 points at 1420.86. Caterpillar, Altria, Verizon, 3M and AT&T were the main Dow winners while Boeing, Exxon Mobil, General Motors and GE were the major Dow laggards.

For the quarter, the sectors that performed well were utilities, energy, cyclical and materials. On the flip side were homebuilders, airliners and Financials.

Market overlooks inflation report; pays more heed to Chicago Index and oil

The stock market started the day on a positive note following news that the Chicago Purchasing Managers Index, a regional manufacturing report, was a much stronger than expected 61.7% in March as against Wall Street economists ‘expectation of 50%. There was also a boost from key inflation data for February. February income and spending were both up 0.6% versus the market's expectations for a gain of 0.3% in each. Core inflation matched economists' expectations.

But the core-PCE component of the Personal Income and Spending report, which is the Fed's favorite inflation gauge was up 0.3% (consensus 0.2%) which pushed the annual rate up to 2.4% from 2.2% in January. The Fed's target range for core-PCE is 1% to 2%. Market overlooked this report.

Telecom services were the only economic sector showing a gain during the first half of the day. Utilities and Energy were the loss leaders, but the lack of participation from the financial and technology sectors were also weighing heavily on the broader market.

For the day and week ending 30 March, Friday, crude-oil futures for light sweet crude for May delivery closed at $65.87/barrel (lower by $ 0.16/barrel or 0.24%) on the New York Mercantile Exchange. Crude prices fell today after rising for 8 straight sessions amid tensions between Iran and UK. The benchmark May crude contract finished nearly 5.7% higher for the week and 4% higher for the month. Prices are down 1.8% from a year ago.

Trading volumes picked up, with 1.6 billion shares exchanging hands on the New York Stock Exchange and 2.1 billion trading on the Nasdaq stock market. Rising shares outpaced decliners by 9 to 7 on the NYSE and by 4 to 3 on the Nasdaq.