Party mood at Wall Street

Jobless claims drop more than expected pushing stocks to fresh fifty-two week high

A deeper-than-expected drop in initial jobless claims bringing it to the lowest level since September 2008, helped push the U.S. stock indices higher for the fifth straight session of gains on Thursday, 24 December, 2009. Wall Street witnessed half a day of trading on that day because of Christmas Eve. With Thursday's gains, indices managed good gains for the week. Wall Street was closed on Friday, 25 December 2009, due to Christmas Day celebration.

For the week, the Dow Jones Industrial Average ended higher by 191.21 (1.9%) points at 10,520.1. Nasdaq ended higher by 74 (3.3%) points at 2285.69. S&P 500 ended higher by 24 points (2.2%) at 1126.48. All ten economic sectors ended higher for the week led by the materials, technology, and energy sectors. The utilities sector was one of laggard.

The week's other corporate developments did not have much to lend support to the market. In the earning area, Walgreen and ConAgra Foods posted slightly better than expected quarterly earnings. Economic data were mixed in nature.

In the earlier part of the week, it was reported that existing home sales rose by a stronger-than-expected rate of 7.4% month-over-month to an annualized rate of 6.54 million units exceeding market estimates of 6.25 million units. The news helped lift the stock market. But later in the week, November new home sales disappointed with an 11.3% month-over-month drop to an annualized rate of 355,000, well below the forecast of 438,000. Still, the data had a limited impact on the market.

Also, the third quarter GDP did not grow as strongly as originally thought. It was reported during the middle of the week that third quarter GDP grew at a 2.2% annual rate, down from the second revision figure of 2.8% and missing the consensus of 2.8%. The lower reading was due to revisions to personal consumption expenditures, gross private domestic investment, change in private inventories, imports and government spending.

The stock market on Thursday, 24 December, 2009, marked an extremely slow session, as expected, as many market participants were off their desks as they took an extended weekend ahead of Christmas. But the economic data of the day managed to push stocks higher.

On Thursday, The Dow Jones Industrial Average ended higher by 54.03 points at 10,520.1. The Nasdaq ended higher by 16.05 points at 2285.69. S&P 500 ended higher by 5.86 points at 1126.48.

The Labor Department in US reported on Thursday, 24 December, 2009 that the first-time claims for state unemployment benefits fell a seasonally adjusted 28,000 to 452,000 in the week ended 19 December, 2009, hitting the lowest level since September 2008. The figure was lower than expectation. The four-week average of new claims fell 2,750 to 465,250, which also hit the lowest level since September 2008.

Initial claims represent job destruction, while continuing claims represent job creation. Benefits are generally available for those who lose their full-time job through no fault of their own. The four-week average smoothes out distortions in the week-to-week data.

Separately, the Commerce Department in US reported on Thursday, 24 December, 2009 that orders for durable goods rose a seasonally adjusted 0.2% in November, 2009.

As per the report, a big drop in volatile aircraft orders was the main reason for the marginal rise in orders. There was a massive 32.6% drop in aircraft bookings. Excluding transportation goods, orders rose 2%. Orders in the latest report were stronger in every major industrial category outside of transportation. Orders for core capital equipment goods, a gauge of business capital investment, jumped 2.9%.

Crude prices shot up considerably higher once again on Thursday, 24 December 2009. Prices continued to rise as energy department reported a more than expected drop in crude supplies for last week a day before. Prices also rose as the dollar fell following couple of economic data.

On Thursday, crude-oil futures for light sweet crude for February delivery closed at $78.05/barrel (higher by $1.38 or 1.8%). Prices crossed $78 mark for the first time in December. Earlier during the day, it fell to a low of $76.17. For the week, crude ended higher by 4.9%.

In the currency market on Thursday, the dollar index, which weighs the strength of dollar against the basket of six other currencies fell by almost 0.1%. The dollar was weak against most of its counterparts following better than expected economic data.

Indian ADRs ended mixed on Thursday. Barring Dr Reddys, Wipro Technologies and Rediff.com, all other ADRs registered gains. Tata Motors was the largest gainer soaring 6.6%.

Trading volume is expected to remain low due to the ongoing holiday mood for next week.

For the year, Dow, Nasdaq and S&P 500 are higher by 19.9%, 44.9% and 24.7% respectively.

Markets Closed Today

Markets are closed today on account of last day of Moharram

List of 2010 Holidays Here

Crude extends gains

Prices cross $78 mark for first time in December

Crude prices shot up considerably higher once again on Thursday, 24 December 2009. Prices continued to rise as energy department reported a more than expected drop in crude supplies for last week a day before. Prices also rose as the dollar fell following couple of economic data.

On Thursday, crude-oil futures for light sweet crude for February delivery closed at $78.05/barrel (higher by $1.38 or 1.8%). Prices crossed $78 mark for the first time in December. Earlier during the day, it fell to a low of $76.17. For the week, crude ended higher by 4.9%.

Crude ended month of November, higher by 0.4%. It reached a high of $82 earlier in October this year.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 44% since then.

In the currency market on Thursday, the dollar index, which weighs the strength of dollar against the basket of six other currencies fell by almost 0.1%. The dollar was weak against most of its counterparts following better than expected economic data.

The Labor Department in US reported on Thursday, 24 December, 2009 that the first-time claims for state unemployment benefits fell a seasonally adjusted 28,000 to 452,000 in the week ended 19 December, 2009, hitting the lowest level since September 2008. The figure was lower than expectation.

EIA reported earlier during the week that crude inventories fell 4.9 million barrels in the week ended 18 December 2009. The EIA also reported that gasoline inventories fell 900,000 barrels, and distillate stockpiles, which include diesel and heating oil, fell by 3.1 million barrels. Market was expecting a drop of 2 million and 1.3 million of crude and gasoline inventories respectively. Inventories dropped as net crude imports fell 0.8% to 7.68 million barrels a day.

In the latest meet at Angola yesterday, members of the OPEC oil cartel decided to make no changes to current production quotas. The decision was in line with market expectations. In keeping its quotas unchanged, OPEC cited "shrinking industrial production, low private consumption and high unemployment" in the global economy.

Among other energy products on Thursday, January gasoline added 0.8% to $1.9820 a gallon, January heating oil rose 1.2% to $2.0356 a gallon.

Also on Thursday, January natural gas lost 2.9% to $5.655 per million British thermal units

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

Future exchanges were closed on Friday, 25 December 2009 due to Christmas Day holiday.

Precious metals end higher for second straight day

Prices rise as dollar continues to stay weak

Bullion metal prices went up on Thursday, 24 December 2009. Prices rose as the dollar fell following couple of economic data. Nevertheless, yellow metal prices witnessed losses for the week. However, silver gained for the week.

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Thursday, gold for February delivery ended at $1,104.8 an ounce, higher by $10.8 (1%) an ounce on the New York Mercantile Exchange. Earlier during the week, gold had dropped below the $1,100 level for first time in more than one and half months. For the week, gold shed 0.6%. The metal fell for four straight weeks.

Gold ended November 2009 higher by 13%. Before that, for the third quarter it ended higher by 8.7%. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year. On a year to date basis, gold price is higher by 26.1%.

On Thursday, December Comex silver futures ended higher by 25 cents (1.4%) at $17.44 an ounce. For the week, silver registered 0.7% gain. The metal has gained 53.6% this year until date.

In the currency market on Thursday, the dollar index, which weighs the strength of dollar against the basket of six other currencies fell by almost 0.1%. The dollar was weak against most of its counterparts following better than expected economic data.

The Labor Department in US reported on Thursday, 24 December, 2009 that the first-time claims for state unemployment benefits fell a seasonally adjusted 28,000 to 452,000 in the week ended 19 December, 2009, hitting the lowest level since September 2008. The figure was lower than expectation.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

Market was closed on Friday, 25 December, 2009 due to Christmas Day holiday.

Copper goes up

Falling dollar increases the appeal of red metal

Copper prices rose higher at Comex on Thursday, 24 December 2009. Prices rose as the dollar fell following couple of economic data increasing the appeal of metals as an alternate source of investment.

At USA, copper futures for March delivery ended higher by 8.9 cents (2.8%) to 3.2925 a pound. For the week, copper ended higher by 2.3%. Copper ended November 2009 higher by 6.6%. On a year to date basis, copper has climbed 120%.

In the currency market on Thursday, the dollar index, which weighs the strength of dollar against the basket of six other currencies fell by almost 0.1%. The dollar was weak against most of its counterparts following better than expected economic data.

The Labor Department in US reported on Thursday, 24 December, 2009 that the first-time claims for state unemployment benefits fell a seasonally adjusted 28,000 to 452,000 in the week ended 19 December, 2009, hitting the lowest level since September 2008. The figure was lower than expectation.

The U.S. buys about 13% of the 17 million metric tons of copper sold annually and China buys about 20%.

In FY 2008, copper prices dropped by 54%. Prior to 2008, copper prices ended FY 2007 with a gain of mere 5.5% after a whopping 44% gain in FY 2006. The price of copper gained every year since 2002 as global economic growth boosted demand for the metal used in pipes and wires.