US Market falters again

Postponement of share buyback plan by WalMart stall the recovery effort

Stocks at Wall Street ended with substantial losses on Tuesday, 09 December. Wall Street started the day in the red. Dow was down by more than 150 points at one point but thereafter it was able to trim its losses. At the end, losses increased and even Nasdaq which was managing to eke out gains earlier, ended in the red. Earnings warning came from Fed Ex and Texas Instruments. Pending home sales in October dropped less than expected. Crude is trading more than a dollar lower around $43 today.

On Wall Street, the Dow Jones industrial average closed down 242 points at 8,691, the Nasdaq closed down by 24 points at 1,547 and the S&P 500 moved down 21 points at 888. Nasdaq had earlier risen by almost 25 points.

All the ten sectors ended in the red today led by the financial sector. JP Morgan led the pack of Dow laggards.

Stocks were in the red right out of the gate today after Federal Express was down 14% today after reducing its fiscal year 2009 earnings guidance and capital spending forecast due to weaker-than-expected economic conditions. The weakness in Fed Ex, which is considered as a parameter for overall economy was the main reason to impart negative momentum in the market since morning.

Though indices were trimming their losses during mid day, the same once again plunged after a government filing released toward the end of the session said that WalMart is suspending its share repurchase program due to the current economic environment and the instability of the credit markets. Wal-Mart said it had about $5 billion remaining in its $15 billion program. Selling intensified after the report.

The National Association of Realtors reported on Tuesday, 09 December, 2008 that October pending home sales fell 0.7% month-over-month, which was better than the expected decline of 3%. September was revised to a drop of 4.3% from a decline of 4.6%.

The index, which is considered a leading indicator of existing home sales, was down 1% from the prior year. Pending home sales in October were mixed regionally, with declines of 8.7% in the West, and 4.3% in the Midwest.

Texas Instruments gave downside earnings or revenue guidance taking the number of semiconductor companies issuing cautious guidance to six.

On Tuesday, crude-oil futures for light sweet crude for January delivery closed at $42.07/barrel (lower by $1.64 or 3.7%) on the New York Mercantile Exchange. It touched a low of $41.83 during intra day trading. Prices reached a high of $147 on 11 July but have dropped almost 74% since then. On 5 Dec, 2008, prices touched a low of $40.5. Last week, prices coughed up 25%. That was the largest weekly loss for crude in past twenty five years. For this year in 2008, crude prices have dropped 52%.

EIA reported today in its monthly short-term energy outlook that the current global economic slowdown is now projected to be more severe and longer than it expected last month, leading to further reductions of global energy demand and additional declines in oil and other energy prices. The EIA is now expecting world GDP growth to slow to 0.5% in 2009, down from an expectation of 1.8% in last month's outlook.

The weekly crude inventory report and the November Treasury Budget are the main economic reports scheduled tomorrow.