US stocks end higher for second straight day

Financial and technology sectors support indices

US stocks managed to end higher for second straight day on Wednesday, 10 March, 2010. It was mainly due to the support from the financial sector that stocks managed to end in the green. The dollar slipped today.

At the end of the day on Wednesday, the Dow Jones Industrial Average ended higher by 2.95 points at 10567.33. Nasdaq ended higher by 18.27 points at 2358.95. S&P 500 ended higher by 5.16 points at 1145.61. Dow opened 15 points higher earlier during the day and was trading higher by 27 points at one time.

Seven of ten economic sectors ended higher for the day led by the financial, technology and energy sectors. Telecom, materials, and consumer staples were the main laggards.

JP Morgan Chase and Bank of America were the main Dow winners while Chevron, Caterpillar, and Merck were the main Dow laggards.

Stocks were subdued ahead of the opening bell, but the broader market got a quick lift from financials. Citigroup was up sharply amid a positive reaction to its $2 billion trust preferred offering. AIG was also up sharply on heavy volume as its upward momentum remained strong following several divestitures.

Technology closely followed financials in supporting the market. Its strength helped send the Nasdaq Composite to a fresh 52-week high. This marks the third straight session that the tech-rich index has outperformed its counterparts. Among tech plays, semiconductor stocks were particularly strong. Stock wise, Google supported the index after the search giant said it would soon conclude negotiations with the Chinese government regarding censorship and monitoring of its Chinese sites.

Despite strength in tech and financials, the two largest sectors in the broader market by market weight, the broader market fell under a bit of pressure during mid session.

The Treasury released its budget statement for February during noon hours. It showed a deficit of $220.9 billion, which is essentially in step with the $222.0 billion consensus, but deeper than the $193.9 billion deficit that was recorded for January. The report did not affect stocks.

Among economic data for the day, the first piece of this week's data was the release of wholesale inventories for January. Inventories unexpectedly slipped 0.2% suggesting stronger-than-expected demand.

In the currency market on Wednesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by more than 0.3%.

Crude prices ended higher on Wednesday, 10 March 2010. Prices closed above $82. Prices rose as crude supplies rose less than expected for last week and due to anticipation of higher demand in the coming months. On Wednesday, crude-oil futures for light sweet crude for April delivery closed at $82.09/barrel (higher by $0.60 or 0.7%). Prices rose to a high of $83.12 during intra day trading.

In the latest weekly inventory report, the EIA reported today that crude-oil supplies were up 1.4 million barrels in the week ended 5 March as against an expected figure of 2.1 million barrels. The EIA also reported a drop of 2.9 million barrels in gasoline stocks and a drop of 2.2 million barrels in supplies of distillates, which include heating oil.

In the latest report, OPEC reported today that it now expects world oil demand to grow by 900,000 barrels a day in 2010. This represents an upward revision of 100,000 barrels a day from the previous assessment.

Indian ADRs ended mixed on Wednesday. HDFC Bank and MTNL were the main gainers soaring 4.6% and 3.1% respectively. Rediff.com was the main loser shedding 1.9%.

For tomorrow, the economic data expected are the initial claims, continuing claims and trade balance data. Other than that, earning reports will continue to pour in tomorrow.