US Market manages a comeback in final hour

Dow and S&P 500 manage to eke out gains as Honeywell provides bullish guidance

US Market remained under pressure for the most part of the day today, Thursday, 13 December, 2007 but at the end ended mixed with Dow and S&P 500 managing to eke out some gains. Mixed economic data ruled the market momentum for most part of the day. . Six out of ten sectors ended higher today led by utilities and industrials. Financials continued to be under pressure for the fourth consecutive day. A good guidance from Honeywell was the main reason for this turnaround. An analyst upgrade on Microsoft also contributed to the same.

Market was down by almost 85 points in the morning hours. Indices lingered in the red for almost entire day. But one hour before closing bell was to ring, indices made a turnaround. The Dow Jones industrial Average ended the day with a gain of 44 points at 13,517.96. The Nasdaq Composite Index, finished lower by 2.65 points at 2,668.49. S&P 500 finished higher by 1.82 points at 1,488.41.

Seventeen out of thirty Dow stocks ended in green today. Honeywell shares climbed almost 5% today after the manufacturer said it expects to meet or beat its earnings target for next year. Financial stocks continued to be the laggards for the day, namely Citigroup, American Express and JP Morgan.

November Producer Price Index (PPI) surged 3.2% caused by a 14% spike in energy prices. The core rate was also up more than expected at 0.4%. This is the largest jump in PPI since 1973. The reading was well above the expected 1.5% gain. The data reflected the inflation issues that the Fed noted in their last policy statement.

Among other economic data, that hit the wires today, new claims for unemployment for the week ended 8 December fell to 333,000 from 340,000 the prior week. The number remains below recessionary levels.

November retail sales were strong across the board. Total sales were up 1.2% and excluding autos the gain was 1.8%.

Crude eases a bit after yesterday’s whopping gains

Barring VSNL and Dr Reddys Laboratories, all Indian ADRs ended in the red today. HDFC Bank and Infosys Technologies were the main two losers shedding 2.9% and 2.4% respectively.

Crude prices eased partly today after traders speculated that recession in the US is avoidable as Federal Reserve will inject cash in the system. Profit booking was another reason as to why prices eased today after rallying by almost 5% yesterday. Crude-oil futures for light sweet crude for January delivery closed at $92.62/barrel (lower by $1.8/barrel or 1.9%) on the New York Mercantile Exchange. Price earlier slipped by more than $2/barrel during the day.

Volume on the New York Stock Exchange hit 1.4 million and losing stocks outran those advancing 2 to 1. On the Nasdaq, more than 2.1 billion shares traded hands, and declining issues ran ahead of advancers about 3 to 1.

Tomorrow, investors will focus on economic reports to set the tone of trading. The Labor Department's influential Consumer Price Index report is expected to hit the wires at 8:30 ET, and will be followed by Industrial Production and Capacity Utilization reports, all before opening bell rings.