General Motors and Countrywide Financials help Dow make triple digit gain
Countrywide Financials and General Motors provided a good boost to US stocks today, Thursday, 13 September, 2007. Crude prices closed today above the $80/barrel mark for the first ever time. But market witnessed a strong rally today which was also powered by a big bounce in financial stocks.
The Dow Jones industrial Average closed higher by 133.23 points at 13,424.88. The Nasdaq Composite Index, finished higher by 8.99 points at 2,601.06. S&P 500 finished higher by 12.39 points at 1,483.95.
Twenty-six out of thirty Dow stocks ended in green today. Mc Donalds, GM and Merck led the group of Dow winners.
McDonald's led the Dow's winning effort as investors showed extreme buying interest into the stock after the company announced a 50% increase in its annual cash dividend to $1.50 per share.
Other than this, GM and Merck helped Dow stage a good rally. General Motors and Merck were off to a good start after being upgraded to Buy at Citigroup and Banc of America, respectively. GM shares soared by 10%. Merck shares were up by marginal 0.5%.
Countrywide secures an additional $12 billion to help itself
Investors got some encouraging piece of news today from Countrywide Financials. Stocks rallied right out of the gate after Countrywide said that the company was able to secure an additional $12 billion in borrowing capacity through new and existing credit facilities. The announcement also gave Countrywide's stock a much needed lift.
Investors were also cheered by jobless claims data ahead of the opening bell. The Labor Department reported its count of Americans making initial applications for jobless benefits climbed 4,000 for the week ended 8 Sept. putting the total number of first-time claims at 319,000.
Countrywide's rally helped prompt a rally in overall financial stocks. All major financial stocks, eg, Lehman Brothers, Citigroup, JP Morgan were up by 2-5% respectively.
Barring Wipro Technologies and WNS Holdings, all Indian ADRs closed in the green today. Satyam and Patni Computers were the top two winners gaining 1.8% and 1.2% respectively.
Crude ends above $80 for the first ever time
Crude oil future prices rose today and reached an all time new high. Crude prices closed above $80/barrel after Hurricane Humberto shut three refineries in Texas. Prices also bore the brunt of yesterday’s report by energy Department which showed that crude supplies dropped more than 7 million barrels and motor gasoline inventories fell a sixth week in a row.
Crude-oil futures for light sweet crude for October delivery closed at $80.09/barrel (higher by $0.18/barrel or 0.3%) on the New York Mercantile Exchange. Futures touched $80.20, the highest intraday price since trading began in 1983. Prices are up 25% from a year ago.
Volume on the New York Stock Exchange topped 1.2 billion, and advancing stocks beat declining issues 10 to 7. At the Nasdaq, nearly 1.7 billion shares were traded, and advancers overtook declining stocks ran even.
For tomorrow, there will be a number of economic reports to dictate market momentum. The latest mix of imports and exports and respective prices will be released in the Current Account report and Import and Export Prices report. Retail Sales reports (giving the latest in consumer spending) and the Industrial Production report (giving the nation's production levels and resource utilization) will be released first. The University of Michigan Consumer Sentiment survey (giving an assessment of business expectations) will also hit the wires.