US market makes a strong start for September

Technology and Energy sectors give a strong boost to stocks

Energy and Technology sectors helped the US market make a strong start today for the month of September, 2007. Stocks rallied right out of the gate today, Tuesday, 4 September, 2007 in spite of weak economic data. Higher crude prices helped the energy stocks immensely.

The Dow Jones industrial Average closed higher by 91.1 points at 13,448.9. The Nasdaq Composite Index, finished up 33.88 points at 2,630.24. S&P 500 finished up 15.4 points at 1,489.42. .

General Motors, Verizon and Exxon Mobil were the main Dow winners today. Home-Depot was the main Dow laggard.

Earlier today, the Institute for Supply Management reported its manufacturing index which was registered at 52.9% in August, just shy of the consensus and down from 53.8% in July. But since any reading above 50 signals growth, sellers were restrained.

Intel shares were up today 1.9% after Banc of America Securities increased its price target to $31 from $29, citing strong demand for notebook computers. Apple shares soared by more than 4% after a research firm said the iPhone was the top-selling smart phone in the U.S. during July.

General Morors tops analysts' estimates

General Motors shares today increased by 3.8% after posting a 6.1% increase in light vehicles sales in the U.S. in August, topping estimates from analysts, who forecast a fall of about 4%.

Technology’s biggest winner today was Yahoo! after Bear Stearns named it a top pick. The Financial sector's resilience to Merrill Lynch cutting their estimates on several large-cap banks was also noteworthy today.

Among Indian ADRs, HDFC Bank and ICICI Bank registered gains of 2% and 3.6% respectively. Among Technology stocks Infy and Wipro went up by 1.9% and 2.4% respectively.

Crude-oil futures for light sweet crude for October delivery closed at $75.08/barrel (higher by $1.04/barrel or 1.4%) on the New York Mercantile Exchange. Price rose on speculation that U.S. oil and gasoline supplies fell last week.

Comments from the Organization of the Petroleum Exporting Countries suggesting that the cartel will not increase production levels when it meets next week also helped support crude prices. Prices are up 8.5% from a year ago.

Volume was light with some traders likely still on holiday, with nearly 1.4 billion shares traded on the New York Stock Exchange, where advancing stocks beat declining issues by a margin of more than 4 to 1. At the Nasdaq, more than 1.8 billion shares exchanged hands, and advancing stocks outpaced decliners by nearly 2 to 1.

For tomorrow, traders’ attention will be focused on economic data to help set the tone of trading. July Pending Home Sales is to be released at 10:00 ET. The Energy Dept.'s weekly inventories report is expected at 10:30 ET while the Fed's Beige Book will be out at 14:00 ET.