Record crude price weighs on US Market

$80 crude and poor guidance from Texas Instrument push stocks down

US stocks closed down today, Wednesday, 12 September, 2007. Crude prices kissing the $80/barrel took a toll on the broader market sentiments. Energy Department reporting higher than expected drawdown in crude inventory was the main reason for crude prices going higher.

Higher energy prices however helped the energy stocks. But Technology and Financials were disappointing sectors. A disappointing guidance from Texas Instruments made the market sentiment further worse.

The Dow Jones industrial Average closed lower by 16.74 points at 13,291.65. The Nasdaq Composite Index, finished lower by 5.4 points at 2,592.07. S&P 500 finished marginally higher by 0.07 points at 1,471.56.

Twelve out of thirty Dow stocks ended in red today. Mc Donalds, IBM, Caterpillar, H-P and Alcoa led the group of Dow laggards. 3M, Boeing, Exxon Mobil, CoCo Cola, and Altria featured among the eighteen winners.

Texas Instruments shares today slipped by 1.7% after the company tightened its third quarter forecasts. Yesterday, after market’s close, Texas Instrument said that it now expects third-quarter sales of $3.56 billion to $3.72 billion. The company's previous outlook forecast sales of $3.49 billion to $3.79 billion.

Nasdaq tries to get a boost from Cardica

Stocks moved in positive and negative territory for almost the entire day today. But rising oil price and sinking dollar made it a roller coaster ride for the indices.

The Nasdaq got some strength from medical-device maker Cardica which got a key European approval for a gadget that connects blood vessels during heart bypass surgery. Shares of Cardica were almost 17% up.

On the top of the hour, a Mortgage Bankers Association survey showed that as rates fell in the week ended Friday, 7 September, mortgage application volume rose 5.5%, refinance volume jumped 6%, and the purchase index increased 5.2%, adjusted for the Labor Day holiday.

Indian ADRs closed mixed today. Infosys, Tata Motors, HDFC Bank and MTNL were the only ADRs who managed to post marginal gains today.

Crude ends at an all time high

Crude oil future prices rose today and reached an all time new high. Crude prices crossed $80/barrel and touched $80.18/bbl during intra day trading. Prices increased today after Energy Department’s weekly inventory report showed that crude supplies dropped more than 7 million barrels and motor gasoline inventories fell a sixth week in a row.

Market was expecting a drawdown around 2.5 million barrels. Crude-oil futures for light sweet crude for October delivery closed at $79.91/barrel (higher by $1.68/barrel or 2.15%) on the New York Mercantile Exchange. Heating oil prices closed at an all time high and natural gas prices closed at a seven month high.

Nearly 1.3 billion shares were exchanged at the New York Stock Exchange, and declining stocks ahead of advancing issues 9 to 7. At the Nasdaq, 1.9 billion shares exchanged hands, and declining issues topped those advancing by a count of 3 to 1.

For tomorrow, there will be a few economic reports to dictate market momentum. The day opens with the weekly Jobless Claims report, which should provide the latest labor market data. The Energy Information Administration will issue its weekly data on natural gas reserves at 10.30 A.M. During the afternoon, the federal government will be issuing the Treasury Budget which is an indicator of Treasury financing.