Wal Street rallies

Dow score more than 100 point gain

US stocks continued with their rally on Wednesday, 16 September. Even though, the movement of stocks was a bit shaky in the initial few minutes of trading, stocks climbed up soon after and ended the day with huge gains. Positive set of economic reports boosted today's rally all the more.

The Dow Jones Industrial Average ended higher by 108.3 points at 9,791.71. The Nasdaq Composite Index, ended higher by 30.51 points at 2,133.15. S&P 500 ended higher by 16.13 points at 1068.76.

Nine of the ten economic sectors ended in the green led by financial, energy and consumer discretionary. Telecom sector was the sole laggard.

In the financial sector, strength among bank stocks came today in the wake of a series of financial conferences. News that the Fed is looking into commercial real estate exposure within the largest U.S. regional banks and that the Fed will immediately begin a consumer compliance supervision program in nonbank subsidiaries of bank holding companies did not stop the rally in the financial sector.

Among earning reports scheduled for the day, Adobe posted better-than-expected third quarter earnings and issued in-line guidance for the fourth quarter. The company also announced that it will acquire Omniture at $1.8 billion.

Among economic reports scheduled for the day, The Federal Reserve reported on Wednesday, 16 September, 2009 that USA's factories showed renewed strength in August and the gain in July was much stronger than first thought.

U.S. industrial production rose 0.8% in August. Output rose a revised 1% in July, double the initial estimate of a 0.5% gain. The gain in July is the largest since October 2008. Production is up in the past two months after falling in all but one of the past 18 months. Industrial production has fallen 10.7% over the past year. Capacity utilization rose to 69.6% in August from 69% in the previous month.

In a separate report, The Labor Department reported on Thursday, 16 September, 2009 that U.S. consumer prices increased a seasonally adjusted 0.4% in August, pushed higher by a 9.1% increase in gasoline prices. In the past 12 months, the consumer price index has fallen 1.5%, largely because energy prices have dropped 23% over that period.

Core consumer prices, which exclude food and energy prices to get a better look at underlying inflation, rose 0.1% in August. The core CPI is up 1.4% in the past year, the smallest year-over-year gain since February 2004.

Upbeat economic reports, weak dollar and more than expected drop in crude inventories sent crude prices at Nymex on Wednesday, 16 September, 2009. On Wednesday, crude-oil futures for light sweet crude for October delivery closed at $72.51/barrel (higher by $1.58 or 2.2%). During intra day trading, it rose to a high of $72.56.

In the latest weekly inventory report, EIA reported a bigger-than-expected drop of 4.7 million barrels in U.S. stockpiles of crude oil in the week ended 11 September, 2009.

The dollar, which has served as a safe-haven asset over the past year because of its low yield, fell back to its lows of the year on Wednesday, after more upbeat U.S. economic reports. The dollar index, which measures the strength of dollar against a basket of other currencies, fell to one year low of 76.15.

Barring Sify and WNS Technologies, all other Indian ADRs ended in the green today. Tata Motors and ICICI Bank were the largest gainers soaring 5.1% and 3.6% respectively.