US stocks end their losing streak

Financial sector and weak dollar push stocks higher

US stocks managed to end their four day losing streak and end with strong gains on Monday, 05 October, 2009. Stocks started the day with little gains but then picked up momentum. The momentum was spurred by the financial sector and weak dollar. Strength among banks lifted the financial sector. The better than expected economic report also added as an additional catalyst, though stocks did not react much to it during the initial hours.

Twenty four of thirty Dow components ended the day with gains. Exxon Mobil, Chevron, Caterpillar, JP Morgan Chase and 3M were the main Dow winners. Travellers, Microsoft, P&G, Coco Cola and WalMart were the main Dow losers.

All the ten economic sectors also ended with gains after the consumer staples sector erased its earlier losses and ultimately ended higher.

Stocks were hit with a bit of midmorning selling pressure shortly after a better-than-expected September ISM Services Index report. The Institute for Supply Management reported on Monday, 05 October, 2009 that the service sectors of the United States expanded in September for the first time in a year.

As per the report, the ISM non-manufacturing index rose to 50.9% from 48.4% in August. This is the highest level since May 2008 and the first time in a year that the index was above the break-even 50% mark. The report detailed that the new-orders index and the business activity index both hit their highest levels since Oct. 2007. The new-orders index rose to 54.2% from 49.9% in August. The business activity index rose to 55.1% from 51.3% in the previous month.

The banking sector was a major gainer today at Wall Street after analysts at Goldman Sachs raised their rating on the U.S. large-cap bank sector.

Crude prices ended higher at Nymex on Monday, 05 October, 2009. Prices rose following a better than expected economic data in the service sector. The weak dollar also came to crude's rescue. On Monday, crude-oil futures for light sweet crude for November delivery closed at $70.41/barrel (higher by $0.46 or 0.71%). During intra day trading, it fell to a low of $68.05. Last week, crude ended higher by 6%.

In the currency market on Monday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 1%. The US Dollar Index traded in negative territory all session, which provided modest price support to some commodities this morning. The dollar fell after finance ministers from the Group of Seven nations made no specific mention of the currency in a communiqué at their weekend meeting.

Barring MTNL and WNS Technologies, all the Indian ADRs ended in the green today. Rediff.com and ICICI Bank were the largest gainers today going up by 8.8% and 4.8% respectively.

For tomorrow, there are no major economic data or economic report scheduled for the day.