US stocks fail to cling to gains

Indices register little losses as dollar fluctuates

US stocks ended with little losses on Wednesday, 10 February 2010. Stocks spent the entire day dancing to the tune of the fluctuating dollar. Stocks started the day in the red and lingered in the red for the entire first half of the trading session. The dollar's rebound amid ongoing speculation about loan guarantees for Greece and a hint at a rate hike from Fed Chairman Ben Bernanke led stocks lower in early action, but the market then recovered as support faded for the greenback. But at the end, indices coughed up all their gains and ultimately ended lower.

At the end of the day on Wednesday, 10 February 2010, the Dow Jones Industrial Average ended lower by 20.26 points at 10038.38. Nasdaq ended lower by 3 points at 2147.87. S&P 500 ended lower by 2.39 points at 1068.13. Dow opened 45 points lower earlier during the day and was trading lower by 91 points soon after. But in between it recovered and was trading higher by 23 points also.

Nine of ten economic sectors ended in the red today led by utilities, healthcare, and materials sectors. Financial sector was the sole gainer.

Of the 30 Dow components, all the financial components like Bank of America, JP Morgan Chase, Travelers and American Express posted gains.

Fed Chairman Bernanke today indicated in a prepared statement for a testimony before the House Financial Services Committee that the Fed might opt to raise the discount rate before long. Though Bernanke's statement was released, his actual testimony has been postponed. The statement has proved to be a positive for the dollar.

In the currency market on Wednesday, the dollar went up amid ongoing speculation about loan guarantees for Greece and a hint at a rate hike from Fed Chairman Ben Bernanke. The dollar index, which weighs the strength of dollar against the basket of six other currencies, went up by almost 0.5%. It rose almost 0.9% against the euro. The greenback has jumped 1% this month on concern that fiscal gaps in Greece, Spain and Portugal may widen.

During the mid trading hours, the dollar weakened and stocks went up. But then, the greenback has reclaimed some of its gains. The dollar's move caused the stock market to give up its gain and return to the unchanged mark.

Among economic report scheduled for the day, The Commerce Department in US reported on Wednesday, 10 February 2010, that the U.S. trade deficit widened to a seasonally adjusted $40.2 billion in December 2009 as imports of crude oil surged, outpacing a large increase in exports. It was the largest trade gap in a year. The trade deficit figure was more than expected.

As per the report, imports of goods and services increased $8.4 billion, or 4.8%, to $189.2 billion, led by higher imports of petroleum, autos, and capital goods. Imports of crude oil rose 9.2% to 8.9 million barrels a day from 8.2 million in November. On the other hand, exports of goods and services rose $4.6 billion, or 3.3%, to $142.7 billion, led by higher exports of civilian aircraft and industrial materials.

In other markets, crude oil prices rose for the third straight day on Wednesday, 10 February 2010. Prices rose despite the weekly inventory report by energy department expected to show an increase in crude and gasoline supplies for last week. The oscillating dollar aided in crude's rise. On Wednesday, crude-oil futures for light sweet crude for March delivery closed at $74.55/barrel (higher by $0.80 or 1.1%). Earlier during the day, prices dropped almost 1.6%.

EIA was expected to announce the latest weekly inventory data today. But the official government estimate was delayed to Friday because of a snowstorm that shut down government offices in Washington, D.C.

Indian ADRs ended mixed on Wednesday. HDFC Bank, VSNL and Wipro Technologies were a handful of gainers. HDFC Bank soared by 1.2% today. Punjab Tractors and Tata Motors were the main losers shedding 3.5% and 1% respectively.

Tomorrow, there are a couple of economic reports scheduled for the day – the initial and continuing claims data. Earning reports will continue to pour in.