Though housing data beats expectation, consumer confidence slips
Concerns about overall economic environment weighed on investors’ minds today, Tuesday, 25 September 2007 and US market ended relatively flat. Reduced sales forecast from top two retailers put market in a tug-of war situation for most part of the day. Market closed mixed. Financial and energy stocks continued to be the laggards with technology trying to offset their effect.
The Dow Jones industrial Average closed higher by 19.6 points at 13,778.7. The Nasdaq Composite Index, finished higher by 15.5 points at 2,683.45. S&P 500 finished marginally lower by 0.52 points at 1,517.21.
Fifteen out of thirty Dow stocks ended in green today. Microsoft, IBM, Boeing and United Technologies led the team of Dow winners. Home-Depot, Wal-Mart, Mc Donalds and Caterpillar were the main Dow laggards.
Retailer, Lowe's today said that it expects FY07 earnings to be at the low end of prior guidance, or slightly below. Another retailer, Target, citing weak guest traffic, lowered its September same-store sales growth forecast to a range of 1.5% to 2.5% from 4.0% to 6.0%. This initiated a wave of selling interest in the early market hours.
Technology sector continued to be in the forefront with Apple, Yahoo and Microsoft shares gaining more considerably. While Microsoft was up by 1.5%, following the launch of its flagship videogame, Halo 3, Apple was by more than 3%. Cisco Systems reached a six year high.
Retailers start a wave of selling ineterst
When market opened in the morning, sellers took position with disappointing news from the retail sector. Dow was down by almost 15 points.
On the top of it, home developer, Lennar posted a sizable loss of $3.25 per share for its third quarter and said it plans on cutting more staff in the fourth quarter.
The Conference Board reported that its Consumer Confidence index slipped to 99.8 in September versus 105.6 in August. But this was not surprising given the rising oil prices in recent days.
National Association of Realtors reported that existing-home sales fell in August for the 13th month in a row. Sales of existing homes fell 4.3% to a seasonally adjusted annual rate of 5.50 million in August, the lowest in five years. Nevertheless, the figure topped expectations of a 5.49 million count.
Among Indian ADRs, Rediff.com continued to be the top gainer for second consecutive day gaining 5.8%. Patni Computers was the topmost loser today shedding 2.3%.
Crude slips below $80
Crude oil prices fell back below $80 today after production resumed after a storm passed through the Gulf of Mexico. The Gulf accounts for about 25% of U.S. With this, crude slipped for the third consecutive day.
Crude-oil futures for light sweet crude for November delivery closed at $79.53/barrel (lower by $1.42/barrel or 1.82%) on the New York Mercantile Exchange. Crude oil fell as low as $78.96 a barrel on the New York Mercantile Exchange today as output increased in the Gulf. Prices are up 29% from a year earlier.
At the New York Stock Exchange, nearly 1.3 billion shares were exchanged, with declining stocks topping advancers about 10 to 7. At the Nasdaq, more than 1.8 billion shares traded, and declining issues ran ahead of advancers 4 to 3.
For tomorrow, the energy inventory report is expected at 10.30 am at Washington. The Mortgage Bankers' Association will release its latest measure of mortgage applications before market opens. Domestic manufacturers will report the newest orders, providing a glimpse into the manufacturing sector's health.