Analyst upgrades fuel US stocks

Alcoa and Intel jointly contribute around 12 points for Dow to rise

US stocks managed a strong start and finish for the day on Monday, 21 December 2009. A relatively weak dollar helped stocks right out of the gate since today morning. Other than that, couple of better than expected earning reports and analyst upgrades of some key companies also helped stocks stay strong today. But dollar also recovered since the open. Some merger related news also aided the rally in the broader market.

At the end, the Dow Jones Industrial Average ended higher by 85.25 (0.8%) points at 10,414.14. Nasdaq ended higher by 25.97 points (1.1%) at 2237.66. S&P 500 ended higher by 11.58 points (1%) at 1114.05.

All the ten economic sectors ended higher for the day led by materials, consumer discretionary and financial sectors.

Health-care stocks also helped to lead the market higher after the Senate voted on Monday to advance health-care legislation in an initial procedural vote, beginning a process that puts the bill on track for passage later this week.

Alcoa was among the key gainers among the Dow components and led the rally in the broader market following an upgrade at Morgan Stanley. The component also aided in the rally in the commodities sector.

In the technology sector, Intel was the major driving force after getting an upgrade at Barclays. Apple, Microsoft, and Cisco Systems were other tech stocks that sported strong gains.

Alcoa and Intel jointly contributed around 12 points of hike in the Dow.

Among earning reports expected for the day, Walgreens and ConAgra announced better-than-expected earnings for the latest quarter. ConAgra also announced an increase in its outlook for fiscal 2010.

In the merger and acquisition area, Terex agreed to sell its mining business to Bucyrus for $1.3 billion.

Crude prices ended lower on Monday, 21 December 2009. Prices fell as traders mulled over the fact that there might be an interest rate hike in the medium term. The relatively strong dollar was also a reason for a drop in prices today. There are a plethora of economic reports expected at US market this week which might show that the economy is slowly emerging out of the recession and hence lead to a rate hike.

On Monday, crude-oil futures for light sweet crude for January delivery closed at $72.47/barrel (lower by $0.89 or 1.2%). Earlier in the day, it was trading higher.

In the currency market on Monday, the greenback started the day relatively weak with the dollar index trading with a fractional loss after it was down roughly 0.2% earlier this morning. Then, the dollar's move caused a pullback in commodity prices. The dollar index, which weighs the strength of dollar against the basket of six other currencies rose by almost 0.3%. Last week, the dollar index gained almost 1.7%.

Indian ADRs ended mixed on Monday with more losers than gainers. HDFC Bank and ICICI Bank were the main gainers adding 1.8% and 1.3% to their last closing prices. VSNL and Wipro Technologies were the main losers slipping 5.5% and 3.5% respectively.

For tomorrow, there are two economic reports scheduled to be released before the open. They are the GDP (Third estimate) and GDP Prices data. Couple of earning reports is also expected.