US Market closes higher for third straight day

Revision of first quarter GDP figure and lower crude price help market post decent gains

US Market ended higher with good gains today, Thursday, 29 May, 2008 and it was the third day of straight gains for the indices. An upward revision to the first quarter economic growth rate and a sharp drop in crude prices were the main catalysts behind today’s market movements. Eight out of ten sectors ended the session in positive territory, led by telecom and financial sectors. Energy was one of the two losers.

Among major economic news of the day in US, first quarter GDP was revised higher to 0.9% from 0.6%, matching the consensus estimate. The reading remained below the 3% normal growth rate but the result was much better than expected. In a separate report, the weekly jobless claims reading held mostly steady at 372,000, which was in-line with expectations.

At midday, the stock market is posting a solid gain at session highs, after fluctuating near the unchanged mark for much of early trade. But at the end, the Dow Jones industrial Average ended the day with a gain of 52.2 points at 12,646. The Nasdaq Composite Index, finished higher by 21.6 points at 2,508. S&P 500 finished higher by 7.4 points at 1,398.

Twenty-four out of thirty Dow stocks ended in the green today. Johnson & Johnson and Citigroup were the main Dow winners today. The decliners were led by Intel.

The earning report section was dominated by retailers once again today. Discount retailers Costco and Big Lots both posted better-than-expected quarterly earnings results, benefiting from consumers' search for bargains. But Sears Holdings reported a loss.

Barring the technology stocks, all other Indian ADRs ended in the red today. Wipro Technologies, Infosys Tech and Stayam registered gains of 2.4%, 2.2% and 3.9% respectively. VSNl was the largest loser shedding almost 2%.

Crude-oil futures marked a sharp drop today, after the dollar strengthened and also after the inventory report was out by the Energy Department. Prices initially rose after the report hit the wires, but soon it started losing grounds and ended substantially lower for the day. Crude-oil futures for light sweet crude for July delivery today closed at $126.62/barrel (lower by $4.4/barrel or 3.4%) on the New York Mercantile Exchange. Oil climbed as high as $132.9 after the inventory data was released.

As per the weekly inventory report by the Energy Department, crude supplies dropped by 8.8 million barrels to 311.6 million for the week ended 23 May. The drop was reportedly due to temporary delays in crude oil tanker off-loadings. Refinery utilization was unchanged last week from the previous week at 87.9% of capacity.

At the currency markets on Thursday, the dollar advanced the most in three weeks against the euro as the government said gross domestic product was stronger last quarter than initially estimated. The dollar climbed as much as 0.8% against a weighted basket of the euro, yen and four other major currencies. The dollar index, which tracks the greenback against a basket of six major currencies, was at 72.971, compared with 72.522 in the previous day.

On the New York Stock Exchange, volume hit more than 1.2 billion shares, and advancers topped decliners nearly 2 to 1. On the Nasdaq, 838 million issues were exchanged, and advancing stocks overtook decliners 8 to 5.

For tomorrow, the April personal income and spending report are the main reports expected before market opens. After that, the Chicago PMI, a regional manufacturing survey, will be released followed by the University of Michigan Consumer Sentiment Index.