Modest gains for US stocks

Technology sector fails to join the rally for second straight day

Without any major catalyst, US stocks lingered in a very narrow range near the unchanged mark for most part of the day on Monday, 11 January 2010. Stocks opened in higher ground amid strength in natural resource. A lack of news flow and other catalysts left stocks to spend most of the session oscillating between red and green.

At the end, Dow managed to eke out modest gains for itself and so did S&P 500. But tech heavy Nasdaq failed to inch up in the green.

At the end of the day on Monday, 11 January, 2010, the Dow Jones Industrial Average ended higher by 45.8 points at 10,663.99. Nasdaq ended lower by 4.76 points at 2312.42. S&P 500 ended higher by 2 points at 1146.98.

Five of ten economic sectors ended in the green led by industrial, utilities, and healthcare sectors. Technology and material sectors lagged. Financial and telecom sectors were almost unchanged.

Alcoa, Chevron and Caterpillar were the main Dow components that led Dow's rally. Chevron and Caterpillar witnessed upgrades at investment firms. Walt Disney remained a main Dow laggard.

Renewed pressure against large-cap tech took the tech sector to a loss. Tech was among the worst performers this session and was been particularly troublesome for the Nasdaq, which lagged the other headline indices for the entire session.

The material sector lent early support stemming from higher commodity prices. The weak dollar and strong trade data from China helped in higher commodity prices. But in the end, the material sector settled with a loss.

In the currency market on Monday, the dollar index, which weighs the strength of dollar against the basket of six other currencies fell by almost 0.8%. It fell to a three-week low against the euro today.

Yesterday, Chinese government report showed that exports climbed for the first time in 14 months and imports reached record highs. China's imports surged 55.9% in December, while exports rose 17.7% from the same period a year ago. The reports showed that shipments of copper and copper products into China rose to about 369,400 metric tons in December 2009. That was up 27% from November and 29% from a year earlier.

Crude oil prices pared all its early gains on Monday, 11 January 2010. Prices rose initially today due to the sinking dollar. Then traders focused on the fact that crude's recent gains were overdone as extreme cold temperature is expected to give way to some warmer temperature in the next few weeks.

On Monday, crude-oil futures for light sweet crude for February delivery closed at $82.53/barrel (lower by $0.22 or 0.3%). Earlier during the day, prices rose to a high of $84.05, a fifteen-month high figure. Crude ended last week higher by 4.3%. On a year to date basis until date, crude is higher by 4%.

Precious metal prices rose for third straight session on Monday, 11 January 2010. Prices rose as dollar slipped following reports in the market about Federal Reserve insisting to keep interest rates low currently in the US market. The same enhanced the appeal of precious metal as an alternate investment. Strong trade data from China also boosted prices.

On Monday, gold for February delivery ended at $1,151.4 an ounce, higher by $12.5 (1.1%) an ounce on the New York Mercantile Exchange. Year to date in FY 2010, gold has risen by almost 5%. On Monday, March Comex silver futures ended higher by 23 cents (1.2%) at $18.7 an ounce. Year to date in FY 2010, silver has risen by almost 10.8%.

After today's close, Alcoa kicked off the earnings session reporting its fourth quarter earnings which it missed. As per the company, "This was a tough year for the aluminum industry - a price crash, demand destruction, and credit crunch. Yet, today Alcoa is stronger than when the year started."

Indian ADRs ended mixed on Monday. MTNL and Dr Reddys were the main gainers soaring 5% and 2% respectively. WNS Technologies and HDFC Bank were the main losers shedding 2% and 1.5% respectively.

Earnings reports will start to pick up next week mainly. The economic report expected for tomorrow is the trade balance data.