Losses mount at Wall Street

Rise in October's industrial production fails to keep buyers in the front for long

Stocks at Wall Street ended with losses once again on Monday, 17 November, 2008 as stocks failed to stick to a brief gain that it had witnessed during the day. Market started the day in the red and Dow was down by more than 250 points at one time. Bit then, it soon slipped into the green. But then, Dow was again down by 50 points. Financial sector was the main laggard today with job cuts news dominating today's market. Crude prices were trading higher earlier but then ultimately closed $2 lower around $55.

At the end, the Dow Jones Industrial Average ended lower by 223 points at 8,273. The Nasdaq Composite Index, ended lower by 35 points at 1,482. S&P 500 ended lower by 23 points at 850. All the ten economic sectors ended in the red today led by financial sector.

Twenty seven out of thirty Dow stocks ended in the red today. Citigroup and IBM were main Dow laggards while GM tried to support Dow to the extent possible.

This morning Citigroup said it will cut 52,000 jobs from its 352,000 workforce. Citi has already cut roughly 36,000 positions in 2008.

Among earnings reports for the day, Lowe's topped expectations for the third quarter, but issued downside guidance for the fourth quarter after warning that consumers will likely delay discretionary home improvement and big ticket purchases. Retailer, Target reported in-line earnings for the third quarter, but decided to temporarily suspend its share repurchase program.

The Federal Reserve reported today, that industrial production (the output of the nation's factories, mines and utilities) increased 1.3% in October after falling a revised 3.7% in September, which was the biggest decline in 59 years. September's decline was originally reported as negative 2.8%.

The increase should be seen as temporary as it was in part due to recovery in mining and regional manufacturing output following hurricane Gustav.

Excluding energy, industrial output slipped 0.1% in October. Excluding motor vehicles, manufacturing output increased 0.8% in October.

Industrial production was down 4.1% compared with a year earlier. Industrial production is one of four monthly economic indicators used to judge whether the economy is in a recession.

Capacity utilization rose to 76.4% in October from 75.5% in September. In manufacturing alone, capacity utilization increased to 73.8% from 73.5%, far below typical usage rates.

In another economic report for the day, the November New York Empire Manufacturing Index, a regional manufacturing survey, showed that manufacturing activity declined to -25.4 from its October level of -24.6. While the reading reflects contraction in manufacturing in the New York region, it was slightly better than the -26 that market expected.

On Monday, crude-oil futures for light sweet crude for December delivery closed at $54.95/barrel (lower by $2.09 or 3.7%) on the New York Mercantile Exchange. It touched a high of $59.85 during intra day trading. Prices reached a high of $147 on 11 July but have dropped almost 63% since then. Last week, prices fell by 6.6%. On a yearly basis, crude price is lower by 45.7%. For this year in 2008, crude prices have dropped 49.2%.

Trading volume was thin, with nearly 1 billion shares traded on the New York Stock Exchange, where decliners overtook advancers 2 to 1. On the Nasdaq, almost 675 million shares traded, and decliners topped advancers 3 to 2.

For tomorrow, the October producer price index is due before the market opens. Other than that, earning reports will dominate where Home Depot is a major name.