US Market pares early gains

Weakness in technology and financial sectors pushes market to end mixed

A late sell-off urged US market to give up most of its gains today, Monday, 19 May, 2008. Market registered good gains during the mid day trading hours but ultimately the indices ended mixed with the technology sector sending Nasdaq into the red at the end. Five out of ten sectors ended the session in positive territory, led by the utilities sector. Technology sector was the greatest laggard.

There were a couple of negative news today in the technology sector. Flash memory maker SanDisk noted it continues to see soft U.S. retail sales, similar to levels it saw in the first quarter. Microsoft also weighed on the market after traders were disappointed that the company is in talks with Yahoo! about aquiring a part of its business, mainly the search engine part.

The Dow was up by 145 points during the mid session. At the end, going into close, The Dow Jones industrial Average ended the day with a gain of 41 points at 13,028. The Nasdaq Composite Index, finished lower by 12.76 points at 2,516. S&P 500 finished higher by 1.26 points at 1,426.

Twenty-two out of thirty Dow components ended the day in green. Alcoa, Chevron, GM and Boeing were the main Dow winners while Home Depot and Microsoft were the main Dow laggards.

Among major economic news, the Conference Board's index of leading economic indicators rose for a second straight month in April. The index, which attempts to forecast turning points in the economy, rose 0.1% in April, matching March's gain after falling for the five prior months.

In earnings news, home improvement retailer Lowe's reported better-than-expected first quarter earnings, but its revenue fell short of estimates and the company lowered its full year outlook. Competitor Home Depot’s shares fell in conjunction with Lowe's.

The financial sector also came under pressure today after Goldman Sachs, Morgan Stanley and Lehman Brothers were laggards after having their second quarter earnings estimates cut at Citigroup.

Crude-oil futures closed above $127 a barrel, below the day's record peak, after concerns regarding demand and supply continued to rattle the energy market. Prices rose amid speculation that Saudi Arabia's decision to increase output by 300,000 barrels a day will be sufficient to reduce prices. Crude-oil futures for light sweet crude for June delivery today closed at $127.05/barrel (higher by $0.76/barrel or 0.6%) on the New York Mercantile Exchange. Price touched a high of $127.77 earlier during the day. But the upcoming expiration of the June futures contracts kept gains in check.

Trading volumes on the New York Stock Exchange reached 1.1 billion shares, with 16 advancing issues for every 15 declining ones. On the Nasdaq stock market, 931 million shares traded, with decliners topping gainers by 16 to 12.

For tomorrow, primary economic release will be the April Producer Price Index, which is due before opening bell. Home Depot, Target, Staples and Medtronic are all scheduled to report their latest quarterly financial results tomorrow morning.