Downgrade of Citigroup by Goldman Sachs send indices lower for the entire day
Financials were back in action today but once again in a negative sense and sent US stocks down for the day, Monday, 19 November, 2007. Together with Citigroup, General Motors too weighed on the stocks. Indices lingered in the red for the entire day, right from the opening. Nine of the ten economic sectors finished in the day in negative territory, Utilities making the sole advance.
The Dow Jones industrial Average ended the day with a loss of 218.3 points at 12,958. The Nasdaq Composite Index, finished lower by 43.86 points at 2,593.38. S&P 500 finished lower by 25.47 points at 1,433.27. Twenty-seven out of thirty Dow stocks ended in red. Altria and Mc Donalds were a couple of Dow winners.
The financial sector came under pressure today after Citigroup was downgraded to sell from neutral by Goldman Sachs. The investment banker further said that it is seeing up to $15 billion in write-downs from collateralized debt obligations during the next two quarters. Citigroup ended the day being down by almost 6%.
But it was General Motors actually which led the team of Dow decliners. GM shed 8.5% today after reports that GMAC Financial Services, the old General Motors Acceptance, is seeing more delinquencies among its auto loans.
H-P delivers blowout report after close
Things started off in a bitter note since early trading hours after home improvement retailer reported disappointing third quarter results before the open. The company also issued an earnings warning for the fourth quarter.
The other economic report of the morning was the National Association of Homebuilders (NAHB) index of builder confidence in November and that was reported at 19. The reading marked the lowest point since 1985. The NAHB cited "mortgage market problems, a substantial inventory overhang and ongoing concerns about the effects of negative media coverage" as the main reasons for the low number.
Indian ADRs ended mixed today, but majority in the red. ICICI Bank and Wipro Technologies were the two topmost losers, each giving up 5.4%. Rediff and MTNL followed them dropping 4.8% and 4.4% respectively.
After the close, H-P came out with its quarterly result beating market expectations. The company’s fiscal-fourth-quarter profit rose 28% from a year ago. The company also raised guidance for the current quarter.
Eyes set on 31 October FOMC minute details
Crude oil prices rose today after the Organization of Petroleum Exporting Countries (OPEC) left production unchanged at a weekend meeting in Riyadh. Trading was quite choppy in nature ahead of upcoming Thanksgiving Holiday, but light trading also fuelled volatility. Crude-oil futures for light sweet crude for January delivery closed at $94.64/barrel (higher by $0.80/barrel or 0.9%) on the New York Mercantile Exchange. Prices are up 70% from a year ago.
Volume on the New York Stock Exchange came to 1.7 billion, and declining stocks topped those advancing about 5 to 1. On the Nasdaq, nearly 2.2 billion shares were traded, and declining stocks outpaced advancers about 4 to 1.
Tomorrow, investors will have the minutes from the Federal Open Market Committee's 31 October meeting once they are released at 2.00PM, E.T. Market has a tendency to scrutinize each and every detail Bernanke and folks use in their statement. Other than that, there is the October's housing starts data which will come out before market opens.