US Markets slump

Credit market turmoil offsets the decent news from holiday season sales

US Market which started on a positive note today, Monday, 26 November, 2007 ended substantially lower after credit market turmoil once again rocked the market. Concerns about the credit markets and weakness in the financial sector continued to weigh on investor sentiment. This offset the positive decent news on the holiday shopping front. All ten economic sectors posted losses today, led by a financial shares.

The Dow Jones industrial Average ended the day with a loss of 237.44 points at 12,743.44. The Nasdaq Composite Index, finished lower by 55.61 points at 2,540.99. S&P 500 finished lower by 33.48 points at 1,407.22.

Twenty-eight out of thirty Dow stocks ended in red. AIG, Citigroup and JP Morgan headed the team of Dow laggards. Boeing and Johnson & Johnson were the sole Dow winners today.

In the financial sector, Citigroup came under pressure after reports that the company may lay off as many as 45,000 workers because of the subprime-mortgage crisis. The stock slipped by more than 3% today. On the other hand, UBS downgraded both Fannie Mae and Freddie Mac – USA’s largest suppliers of mortgage capital.

Preliminary reports from National Retail Federation said sales at retail stores jumped 8.3% to $10.3 billion on "Black Friday" - the day after Thanksgiving, which unofficially kicks off the holiday shopping season. However, shoppers seemed to spend about 3.5% less per person.

Cisco Systems weigh on technology stocks

HSBC Holdings too came out with its share of bad news today. The company said that said it would move two of its structured investment vehicles onto its balance sheet and provide up to $35 billion in funding.

On the tech front, Cisco Systems was the main laggard. The company’s stock came under pressure after Morgan Stanley said that Cisco's emerging market business is slowing and is an area of concern.

Barring Dr Reddys, Rediff and Patni Computers, which registered minor gains, all other Indian ADRs slipped into red. HDFC Bank and ICICI Bank led the losers dropping 5.5% and 5.9% respectively.

Crude oil eases a bit on OPEC speculation

A possible production increase from the Organization of Petroleum Exporting Countries (OPEC) and the sliding dollar sent oil prices a little lower today. Price rose earlier in the day but then gave up all its gains. Crude-oil futures for light sweet crude for January delivery closed at $97.7/barrel (lower by $0.49/barrel or 0.50%) on the New York Mercantile Exchange. Prices are up 65% from a year ago.

Traders speculated today that the 12 members of the OPEC will probably increase output 1.1% to 31.6 million barrels a day this month. Earlier in September, 2007, OPEC had agreed to raise production targets for the 10 members with quotas by 1.9% starting 1 November.

Trading volumes showed 1.5 billion shares exchanging hands on the New York Stock Exchange and 2.1 billion on the Nasdaq Stock market. Declining stocks topped gainers by 25 to 8 on the NYSE and by 3 to 1 on the Nasdaq.

Tomorrow, the Conference Board will release the November Consumer Confidence reading at 10:00 ET and market expects the number to come in at 91.5. Other than that, a few earning reports are expected.