A lousy welcome for new President from Wall Street

Financial sector plays the spoilsport

Stocks at Wall Street showed absolutely no signs of improvement on Tuesday, 20 January, 2008 as USA welcomed its 44th President Barack Obama amid cheers and tears. The financial sector played the absolute spoilsport in today's historic day and stocks lingered in the red for the entire day. Some of the financial Dow components marked record lows.

The Dow Jones Industrial Average ended lower by 332 points at 7,949, the Nasdaq closed lower by 89 points at 1,440 and the S&P 500 closed lower by 45 points at 805.

All the thirty Dow components ended in the red. Shares of Bank of America and Citigroup plunged by 29% and 20% respectively.

The former President, George Bush, thrusted a huge deal of responsibility on Obama who is working hard to get going with a stimulus plan of $800 billion to boost the US economy.

All the ten sectors ended in the red today led by the financial sector. The global financial system once again raised questions after Royal Bank of Scotland announced it might face a record loss valued at more than $40 billion for 2008.

Cisco systems and Microsoft are weighing on the tech heavy Nasdaq today.

Earning cautions continued even today as Johnson & Johnson issued a lower than expected earnings for 2009. Johnson & Johnson's outlook reflects the prospect for lower sales amid generic competition and stiff currency headwinds. But the company surpassed market's expectations in its latest quarter earning report.

After the close, IBM posted fourth quarter earnings which checked in better than expectations. IBM's revenue fell roughly 6% year-over-year to $27 billion. The consensus forecast called for $28.2 billion. IBM issued upside guidance for fiscal 2009. IBM is one of the few companies to step out and issue upside guidance this earnings season.

Crude oil prices pared their earlier losses and ended higher today. Prices rose due to the impending stimulus package that is expected to be announced by new President Barack Obama soon. Prices were also volatile as traders moved their positions to cover the March positions as the February expired today. On Tuesday, crude-oil futures for light sweet crude for February delivery closed at $38.74/barrel (higher by $2.23 or 6.1%) on the New York Mercantile Exchange. Earlier it dropped to a low of $32.5. March crude, the new front-month contract, fell $1.73 to end at $40.84 a barrel on Nymex. Last week, crude prices shed 10.6%.

At the currency market on Tuesday, the U.S. dollar rose against its major rivals. Worries about the U.K. banking sector sent the British pound to a six-year low versus the U.S. dollar and an all-time low versus the Japanese yen.

Tomorrow, there will be no economic reports on the dock. Few companies are expected to declare their earning reports.