Falling bond yield and lower crude prices boost investor sentiment as traders gear up for earnings season
The US market finished higher today after investors expected that the earnings season, beginning today, 9 July 2007, with Alcoa, will top the lowered expectations. Falling bond yields and slipping crude prices also cheered investors. The absence of tech's leadership today, 9 July 2007, alongside declines in financial and health care prevented a more convincing performance for the indices.
The Dow Jones Industrials ended the session with a gain of 38.29 points to close at 13,649.97. The tech-heavy Nasdaq gained 3.51 points to close at 2,670.02 and S&P 500 closed higher by 1.41 points at 1,531.85.
Nineteen out of 30 Dow stocks closed in the green today. Alcoa, Caterpillar, Boeing, Exxon Mobil, Intel and Johnson & Johnson were the main Dow winners today. Mc Donalds, H-P, AT&T and Honeywell were the main Dow laggards.
J&J shares today gained 1% after announcing a share repurchase program of up to $10 billion. Boeing gained 1% and reached an all-time high after the company unveiled its 787 Dreamliner and announced new orders for the plane.
Alcoa disappoints investors and shares slip in after hours trading
Stocks opened slightly higher in the morning as investors anxiously waited for the Q2 earnings. The absence of upside leadership from influential areas like health care, tech and consumer discretionary stalled follow-through efforts.
During mid-day stocks were trading in a split mode. The most noteworthy factor was the energy sector ignoring the slipping crude prices.
The yield on the 10-year Treasury note closed at 5.159%, down from 5.195% on last Friday.
After the close, Alcoa today reported that said it earned 81 cents a share from continuing operations in the second quarter, compared with 77 cents a year ago. Earnings per share were 81 cents, down slightly from analyst expectations of 83 cents.Revenue was 8.1 billion, in line with Wall Street estimates, and up from $7.9 billion.
Infosys Technologies to report after closing bell tomorrow
Crude oil futures fell today but once again stayed above $72/barrel today on speculation that demand will decline as US refineries shut units. Crude-oil futures for light sweet crude for August delivery closed at $72.19/barrel (lower by $0.62/barrel or 0.85%) on the New York Mercantile Exchange. It was the first decline in eight sessions but prices reached $73 during intraday sessions.
Today, the International Energy Agency revised its world oil demand forecast and said that it would rise faster than expected over the next five years. Global oil demand is forecast to expand by 1.9 million barrels a day (2.2%) a year on average, reaching 95.8 million barrels a day by 2012. The previous medium-term forecast estimated growth of 2%.
Trading volumes showed 1.3 billion shares trading on the New York Stock Exchange and 1.9 billion trading on the Nasdaq stock market. Gaining issues topped decliners by 17 to 15 on the NYSE, while decliners topped gainers by 15 to 14 on Nasdaq.
For tomorrow, market will continue to focus on quarterly earnings reports. Pepsi Bottling Group will report its quarterly results before the market open, while Infosys Technologies will report after the closing bell. On the economic front, wholesale inventories for May will be out at 10:30 ET.