US Market registers modest gains

Indices give up half of their gains in the second half as crude stays at all time high

US Market registered modest gains today, Thursday, 08 May, 2008. A better than expected retail sales data in April did take market higher considerably up after the opening bell. But market gave up more than half of its gains post lunch hours. Ultimately it ended the day with modest gains. Crude prices soaring above $124/barrel once again sent a vibe of negative feeling across the market. Seven of the ten major economic sectors finished higher. Financials once again led the group of negatives.

The Dow was up by almost 85 points earlier in the day. At the end, going into close, The Dow Jones industrial Average ended the day with a gain of 52.4 points at 12,866.7. The Nasdaq Composite Index, finished higher by 12.7 points at 2,451.2. S&P 500 finished higher by 5.1 points at 1,397.5.

Twenty out of thirty Dow components ended in the green today. Wal-Mart was one of the main Dow winners while AIG was one f the main Dow laggards.

Among major economic news of the day, several key retailers reported positive same-store sales results for April. Wal-Mart reported an increase of 3.2%, excluding fuel sales. Costco announced 8% growth. Target announced growth of 3.1%, though the results were slightly below what the company planned.

Wholesale inventories for March declined 0.1%, which is below the 0.5% growth that economists anticipated. Last month's reading was revised lower to 0.9% growth from an initial reading of 1.1% growth.

Also, initial jobless claims for the week ending 3 May totaled 365,000, which is below the consensus forecast of 370,000 claims. The prior week's jobless claims were revised higher to 383,000 from 380,000. Notably, the four-week average has increased to 367,000 from 364,500. However, the weekly figures remained inconsistent with levels associated with a recession.

Indian ADRs ended mixed today. ICICI bank and Sify were the main two laggards.

Crude-oil futures touched a fresh record once again above $124 today. Weaker dollar and tensions regarding overall global supplies were the main reasons to push crude prices higher today. Prices for crude oil have been hovering around $124 against a backdrop of disruptions to oil production in Nigeria. Crude-oil futures for light sweet crude for June delivery closed at $123.69/barrel (higher by $0.16/barrel or 0.1%) on the New York Mercantile Exchange. Price touched a high of $124.5 earlier during the day. In the past five sessions, crude prices have gone up by almost $11.2 (9.9%). For the year, crude is up by 26.8% till date.

On the currency markets today, the dollar was modestly lower losing ground to the euro and the pound after both the European Central Bank and the Bank of England both decided to hold policy steady. ECB President Jean-Claude Trichet cited inflation risks in his statement, further bolstering the common currency. The dollar index, which measures the greenback against a basket of six major currencies, fell 0.2% to 73.37.

For tomorrow, the March trade balance is the sole item on the economic calendar.