A quiet week at Wall Street

All three indices in the green on a year to date basis

It was a quiet week for the US market that ended on a relatively steady note on Friday, 12 June, 2009. Indices managed little gains for the week. Fluctuation of the dollar imparted quite some impact on the commodities sector. News and economic report flow was relatively slow during the week. But the economic reports that checked in hinted at an improving US economy. Trading volumes were exceptionally low during the last two days of trading hinting that traders were in an extremely cautious mood.

The Dow Jones Industrial Average gained 36.14 points (0.4%) for the week to end at 8,799.26. Tech - heavy Nasdaq gained 9.38 (0.5%) to end at 1,858.8. S&P 500 gained 6.12 (0.7%) to end at 946.21. Seven of the ten sectors ended in the green led by the utilities sector. Consumer staples sector was the main laggard.

Cisco Systems and Travelers replaced shares of General Motors and Citigroup respectively in the Dow since Monday, 08 June, 2009.

During the week Treasury department announced that 10 of the 19 largest U.S. banks will be allowed to repay TARP funds. BB&T Corp, US Bancorp, Capital One, JPMorgan Chase, Bank of New York Mellon, American Express, Northern Trust and Goldman Sachs were among the companies that have received permission to repay TARP funds to the Treasury.

The Fed's Beige Book hit the wires during the middle of the week. It stated that the economy remains weak, but that the signs of decline are slowing. The Beige Book also revealed that five of the 12 Fed districts see economic declines moderating; several districts also indicated that their expectations have improved yet they do not see a substantial increase in economic activity through the end of the year.

Among the major economic reports expected for the week, the May Treasury deficit came in at $189.7 billion. The Commerce Department reported that this was slightly more than the consensus that called for a deficit of $181 billion and much larger than the prior deficit of $28.6 billion.

The Labor Department in USA reported on Thursday, 11 June, 2009 that while first-time claims for state unemployment benefits have declined or been flat over the most recent four weeks of data, ongoing claims have continued to reach fresh weekly highs. The number of initial claims fell 24,000 to 601,000 in the week ended 6 June, 2009. For the week ended 30 May, continuing claims for benefits reached a new record high, rising 59,000 to 6.82 million from an upwardly revised level in the prior week.

Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs. Benefits are generally available for those who lose their full-time job through no fault of their own. Those who exhaust their unemployment benefits are still counted as unemployed if they are actively looking for work.

Among other important reports, the Commerce Department in USA reported that sales at U.S. retail stores increased 0.5% in May.

In the US market on Friday, 12 June, 2009, stocks spent most of the session confined to a narrow trading range in negative territory, but managed to move higher heading into the final leg of trading. The Dow Jones Industrial Average ended higher by 28.3 points at 8,799.26. The Nasdaq Composite Index, ended lower by 3.5 points at 1,858.8. S&P 500 ended higher 1.3 points at 946.2.

One of the market's recent primary leaders, materials stocks grappled with selling pressure as basic commodities got knocked around by a resurgent U.S. dollar. The weakness among commodities was easily visible among oil prices

Tech stocks also showed weakness during the session. That had weighed considerably on the Nasdaq Composite, which has lagged the other headline indices for the entire session. Weakness was particularly strong among semiconductor stocks for the second straight session.

Oil prices pared part of their earlier losses but ended ultimately lower on Friday, 12 June, 2009. Stronger dollar and comments from OPEC in its latest monthly statement took crude prices lower. But, crude registered good weekly gains. On Friday, crude-oil futures for light sweet crude for July delivery closed at $72.04/barrel (lower by $0.64 or 0.9%). During intra day trading, crude fell to a low of $70.8. For the week, crude ended higher by 5.3%.

The Organization of Petroleum Exporting Countries (OPEC), which now accounts for about one-third of the world's oil production, said in a monthly report that its May output from its 12 members averaged 28.27 million barrels a day, up 135,000 barrels from a month ago. Thus, OPEC's production rose for the second month. OPEC also said in the monthly report that 2009 global demand is expected to drop 1.6 million barrels a day from a year ago.

In the currency market on Friday, the dollar index, which weighs the strength of dollar against the basket of six other currencies, went up by 0.9%. Finance ministers from the Group of Eight industrial nations convened on Friday and Saturday in Italy as they attempted to lay groundwork for the meeting of G8 heads of state at their summit scheduled for next month. The dollar was higher against most of its rivals, with the euro down 0.5%.

For the year 2009, Dow is up by just 0.3%. The Nasdaq and S&P 500 are up by 17.9% and 4.8% respectively.