Technology sector helps US Market to register gains

After staying in red for first half, indices creep in the green buoyed by technology and financial stocks

After a volatile day of trading, US Market ended the day with modest gains today, Thursday, 19 June, 2008 mainly with the help of technology stocks. Crude prices slipping down by almost 4% also added to the positive momentum. But gains were restricted due to weakness in the financial sector where Citigroup announced that it might go for some more write downs in the coming quarter. But a reversal in the financial sector late in the day, also aided in market’s course reversal.

The Dow Jones industrial Average traded in red for the entire first half today. It then slipped in the green in the post lunch hours, manly after crude prices slipped. Going into close, the index ended the day with a gain of 34 points at 12,063. The Nasdaq Composite Index, finished higher by 32.3 points at 2,462.07. S&P 500 finished higher by 5 points at 1,342.

The day started on a rather choppy as disconcerting comments from the financial sector and mixed economic data have taken the focus away from lower oil prices.

Earlier in the day, financial giant Citigoup stated it will continue to have substantial marks on subprime exposure this quarter and a monoline adjustment could be on par with that of last quarter. The same started taking a toll on the financial sector.

In terms of economic data, initial jobless claims for the week ending 14 June totaled 381,000, down 5,000 from the prior week, but above the 375,000 claims that were expected. Notably, continuing claims through totaled 3.06 million, which is down from the previous tally of 3.14 million.

The Philadelphia Fed Index for June, a regional assessment of manufacturing activity, came in at -17.1, which was worse than the reading of -10 that market was expecting. Also, a reading of leading economic indicators for May climbed 0.1%, matching the prior month's reading and exceeding the consensus prediction, which called for a flat reading.

In the technology sector, large-cap tech stocks like Microsoft and Intel helped lead the way.

Crude prices acted in a volatile manner throughout the day today. Crude-oil futures closed with a loss of almost $5 a barrel after China raised its fuel prices, sparking concerns about a slowdown in demand. Oil prices climbed earlier on news that a Royal Dutch Shell oil platform off the coast of Nigeria was shut down after an attack by local militants but then slipped again but ended considerably lower for the day.

Crude-oil futures for light sweet crude for July delivery today closed at $131.93/barrel (lower by $4.75/barrel or 3.5%) on the New York Mercantile Exchange. Prices on Nymex climbed as high as $137.35 earlier on the heels of a shutdown of an oil platform in Nigeria. Prices are 91% higher than a year ago.

It was reported today that China, the second-biggest fuel consumer after the U.S., will increase gasoline and diesel prices by as much as 18%. It was also reported today that Saudi Arabia plans to increase crude-oil production by 200,000 barrels a day.

There is not much scheduled Friday, with only one company reporting earnings, no economic reports and no Fed speakers.