US Market ends higher after a sea saw ride

Cisco Systems pushes Technology stocks higher and reinforces global economic strength

Upbeat earnings report from Cisco Systems last night and an unexpected rally in the home building sector took US stocks higher today, Wednesday, 8 August, 2007. But market almost gave up all of its gains during mid day when rumors about Goldman Sachs hit the market. Once it was clarified that they were just rumors, the indices once again clawed back much of their day’s gains while going into close.

The Dow Jones Industrial Average gave up its 190 point gain at one point and was up by just 11 points the very next moment. But financial stocks once again showed their resilience today. The Dow Jones Industrials Average today rose by 153.56 points at the end to close at 13657. Tech-heavy Nasdaq gained 51.38 points to close at 2612. S&P 500 added 21.78 points to close at 1497.49.

Twenty-three out of thirty Dow stocks closed in the green today. General Motors and Mc Donalds were the notable Dow leaders.

General Motors shares today advanced 4%. At an analyst meeting in Michigan, GM’s CFO reiterated the automaker's 2007 target for 3 million in retail unit sales, and said GM remains on track to shave costs by $9 billion by the end of the year.

The Technology sector today was the biggest beneficiary of Cisco's solid quarterly report. Its upbeat outlook painted a comforting picture of global economic strength and helped restore confidence across all sectors.

Investment Banks and Thrifts & Mortgages were among today's biggest winners

When market opened in the morning, all the three indices opened in the green. Nasdaq was up more than 1% after Cisco, which is now the Nasdaq's second most influential component, reported a 25% jump in Q4 profits and raised its long-term revenue forecasts last night.

But it was the Financial sector which led the charge. Investment Banks and Thrifts & Mortgages were among today's biggest winner. Materials and Energy sectors turned in the next best performances.

Also, President George Bush’s overall comments about economy and reassurance offers led some additional validation to the recent shift toward a more positive underlying tone.

But a speculation late in the day that Goldman Sachs will make a potentially troubling announcement after the close took the wind out of the market's sails. But soon, the news was declared as a rumour and bargain hunters were back.

Dow component McDonald's was up 1.1% today after the fast-food giant reported a 6.5% rise in same-store sales for last month.

Energy sector shows its resilience to falling oil prices

The Energy sector's resilience to falling oil prices was noteworthy. Crude oil futures went through some volatile trading today but ultimately closed lower for the day.

Higher than expected fall in crude supplies and decrease in gasoline consumption as reported in the weekly inventory report were the main causes for this drop in price today. Crude-oil futures for light sweet crude for September delivery closed at $72.15/barrel (lower by $0.27/barrel or 0.37%) on the New York Mercantile Exchange. Prices rose as high as $73.20 a barrel earlier in the session.

Volume at the New York Stock Exchange showed nearly 2.6 billion shares exchanged, while more than 3.5 billion shares were traded at the Nasdaq. Advancing issues topped decliners 8 to 3 on the NYSE, while advancing issues topped decliners 7 to 3 on the Nasdaq.

Since Initial Claims is the only economic report scheduled tomorrow, July same-store sales figures and earnings reports will be the focal point for tomorrow.