A mixed finish for US Market

Warren Buffet gives Dow a good lift but technology stocks drag Nasdaq lower

US Market closed mixed today, Tuesday, 12 February, 2008 after Dow ended considerably higher but technology stocks retreating back in the late hours. Stocks got a psychological lift from billionaire investor Warren Buffett's proposed buyout of bond insurers' liabilities. Nine of the ten economic sectors ended the day in positive territory. Technology was the sole decliner.

It was reported early morning today that Warren Buffett's Berkshire Hathaway has made an offer to several flagging bond insurers. Berkshire Hathaway has sent an offer to reinsure the municipal bond holdings of Ambac, MBIA and FGIC. Berkshire offered to take a liability of $800 billion, adding $5 billion of its resources. Berkshire pledged there would be no distribution or management fees taken for 10 years.

After being up by more than 200 points at one time, The Dow Jones industrial Average ended the day with a gain of 133.4 points at 12,240. The Nasdaq Composite Index, finished lower by 0.02 points at 2,320.04. S&P 500 finished higher by 9.7 points at 1,348.7.

Twenty-seven out of thirty Dow stocks ended in the green today. Boeing, Merck, Du-Pont along with financial stocks like Citigroup, American Express and JP Morgan led the team of winners. The Warren Buffet news gave the financial sector a good boost today.

Dow component General Motors today reported a fourth quarter profit today, beating the expected loss. But the company also reported losses of $38.7 billion last year - its biggest annual decline.

On the technology front, Nasdaq ended marginally lower today led by Apple, Google, RIMM and Amazon stocks.

Barring VSNL, MTNL and Patni Computers, all Indian ADRs ended in the green today. HDFC Bank and ICICI Bank ended higher by 3.7% and 2.6% respectively.

Crude prices fell today. This was crude’s first fall in four days. Prices fell today on forecasts that a government report tomorrow will show U.S. stockpiles increased for a fifth week. US stockpiles are expected to climb by more than 2 million barrels last week. Crude-oil futures for light sweet crude for March delivery today closed at $92.78/barrel (lower by $0.81/barrel or 0.9%) on the New York Mercantile Exchange. The price earlier rose to an intraday high of $94.15 earlier and fell to a low of $94.76.

Volume on the New York Stock Exchange topped 1 billion, and advancing stocks topped those declining more than 2 to 1. On the Nasdaq, nearly 1.6 billion shares exchanged hands, and advancers topped decliners 2 to 1.

Tomorrow, Retail sales data for January is due. Additionally, business inventories are expected in tomorrow followed by the weekly crude oil inventory report.