Stocks end mixed at Wall Street

Nasdaq ends in the red despite H-P's good earning report

It was quite a choppy session at Wall Street today and stocks ultimately ended the day mixed on Tuesday, 25 November, 2008. Market started on a strong note but by mid day it failed to stick to its gains and the indices slipped into the red for a brief time. But after that, they managed to inch back in the green, though with just marginal gains. Though the government's new plan to revive the economy tried to give some boost, the energy and the technology sectors are playing the spoilsport today.

On Wall Street, the Dow Jones industrial average closed up 36 points at 8,479. The tech heavy Nasdaq lost 7 points at 1,464 and the S&P 500 surged 6 points at 857.

Eight of the ten sectors ended in then green today led by the financial sector. The technology and consumer staples sectors were the main laggards.

Sixteen out of thirty Dow stocks ended in the green today. JP Morgan was the main Dow winner while being followed by other financial stocks.

In order to save the US economy from slipping further, the Federal Reserve created a program that will purchase direct obligations of housing-related government-sponsored enterprises such as Fannie Mae and Freddie Mac. The Fed is taking this action to reduce the cost and increase the availability of credit to purchase houses. The Fed will purchase up to $100 billion in direct GSE obligations and up to $500 billion in mortgage-backed securities.

In addition, the Fed created a Term Asset-Backed Securities Loan Facility so market participants can meet the credit needs of households and small businesses by supporting asset-backed securities collateralized by student loans, auto loans, credit card loans and loans guaranteed by the Small Business Administration. The New York Fed will extend $200 billion in loans for the consumer credit facility, while the Treasury will extend $20 billion in TARP funds.

Market reacted positively to these incentives but gloom economic data soon took over.

Among economic reports for the day, the Conference Board in US reported today that falling gas prices perked up consumers in November. Confidence among consumers rose in November from a record low in October. The November consumer confidence index increased to 44.9 from an upwardly revised October reading of 38.8.

While falling gas prices perked up consumers in November, concern has grown over the current jobs market. However, consumers' view of current conditions worsened in November, with those saying jobs are "hard to get" rising to 37.2% from 36.6% in the prior month.

However, consumers' view of current conditions worsened in November, with that index declining to 42.2 from 43.5. Overall consumers' expectations were less pessimistic, with that index rising to 46.7 from 35.7. Those expecting business conditions to worsen over the next six months declined to 28.1% from 36.5%, and those expecting fewer jobs declined to 33.3% from 41.5%.

In a separate report, The Case-Shiller home price index reported that home prices in 20 major U.S. cities dropped 1.8% in September from the prior month, and they fell a record 17.4% on a year-over-year basis. September's prices were down in all 20 cities, compared to both August 2008 and September 2007.

Also, the preliminary GDP report revised the contraction in the economy during the third quarter to 0.5% from 0.3%, which matched expectations. Third quarter consumption was revised to -3.7% from -3.1%, which was a larger decline than the expected reading of -3.2%.

Among major earning reports for the day, H-P reported earnings after yesterday's close. The company held its 2009 earning guidance steady. Also it reported its fourth quarter results matching expectations. The stock still skidded 7% today. This has pulled the technology sector down today though Google is trying to give some support.

Crude prices ended substantially lower today. Crude prices fell after traders speculated that tomorrow's weekly inventory report will show rise in weekly supplies. But losses in crude price were limited due to the weak dollar. Crude-oil futures for light sweet crude for January delivery closed at $50.77/barrel (lower by $3.73 or 6.8%) on the New York Mercantile Exchange. Earlier in the day, prices touched a low of $50.52.

Volume on the New York Stock Exchange neared 1.9 billion, and advancers ousting decliners more than 2 to 1. On the Nasdaq, more than 1 billion shares traded, and advancers topped decliners 5 to 4.

For tomorrow, most investors will turn their attention to the October durable goods orders data and October personal income and spending data. Initial jobless claims data and October new home sales for the week ended 22 November will also hit the wires tomorrow.