Market embraces third quarter real GDP figure with a smile
After a few ups and downs today, Thursday, 29 November, 2007, US Market managed to end with modest gains. Market spent the morning hour digesting a mixed batch of economic reports. In the mean time crude oil price shot up beyond $95/barrel once again but at the end, gave up almost all the gains and closed a little higher. Six out of ten economic sectors posted gains.
The Dow Jones industrial Average ended the day with a gain of 22 points at 13,311. The Nasdaq Composite Index, finished higher by 5 points at 2,668. S&P 500 finished marginally higher by 1 point at 1,470. Seventeen out of thirty Dow stocks ended in green today. Altria and AT&T led the team of Dow winners.
Of the four sectors that ended in the red today, Financials led the way.
On the economic front, third quarter real GDP was revised upward to a very strong 4.9% annual growth rate from a previously reported 3.9%. This was in-line with expectations. Market welcomed this good piece of data.
On the earnings front, Sears Holding posted a third quarter profit which was a whopping 99% drop in earnings compared to a year-ago. Sears shares plummeted 10%.
Indian ADRs close in the red despite market registering modest gains
The other data that hit the market today was that the initial jobless claims for the week ended 24 November rose to 352,000 from 329,000 the week before.
Among other economic data, October New Home Sales rose 1.7% to 728,000, compared to the prior revised reading of 716,000. The only reason new home sales rose this month was because the previous reading was revised down to 716,000 from 770,000.
Barring Rediff and Sify, all Indian ADRs ended in red today. Tata Motors and ICICI bank were the main losers giving up 3.6% and 2.2% respectively.
Explosion at the four Canadian pipelines that supply crude to US took crude prices substantially higher today during the early trading hours. But then, on news that two of the pipelines are reopening, prices slipped below and ended marginally higher for the day. The other two are expected to be operational in a couple of days.
Crude-oil futures for light sweet crude for January delivery closed at $91.01/barrel (higher by $0.39/barrel or 0.4%) on the New York Mercantile Exchange. Today price reached beyond $95/barrel initially after two of four pipelines closed after yesterday's blast reopened today. Prices reached a high of $99.2 on 21 November. Prices are up 49% from a year ago.
On the New York Stock Exchange, more than 1.3 billion shares traded hands, and declining stocks slightly outpaced those advancing about 9 to 7. On the Nasdaq, more than 2.1 billion shares were exchanged, and decliners topped advancers about 8 to 7.
Tomorrow, investors will look for new economic data to help set the tone of trading. The key consumer indicators of consumer income and spending will be released before market opens followed by Fed's key inflation measure - the core PCE price index. Also garnering attention will be the Chicago Purchasing Managers Index of regional manufacturing.