Healthy gains at Wall Street

Dow manages to hit the psychological 11,000 mark

US stocks registered gains for sixth straight week that ended on Friday, 09 April, 2010. Economic reports and a few earning reports dominated the week. News about Greece and other geo political tensions made the main headlines. Medium and small cap stocks led the upward move. The Dow managed to hit the psychological 11,000 level just before the close on Friday.

For the week, that ended on Friday, 09 April, 2010, Dow ended higher by 70.28 points (0.6%) at 10,997.35. Nasdaq ended higher by 51.47 points (2.1%) at 2454.05. S&P 500 gained 16.27 points (1.4%) at 1194.37. Seven of ten economic sectors ended higher led by substantial gains in financial and consumer discretionary sectors.

The major averages began the week on a positive note on the heels of positive economic data. The only notable sell-off for the week occurred on Wednesday, 7 April, afternoon. It began following a speech by Fed Chairman Ben Bernanke. But the minutes had no surprises and long term impact on the market. Headlines about Greece circulated all week. They weighed on equities Thursday, 8 April but were not enough to keep the major averages lower.

The economic reports during the week had limited impact on trading. Latest report showed that consumer credit in February fell by $11.5 billion. It was expected to contract by just $0.7 billion. Consumer credit for the prior month was revised upward to a $10.6 billion increase from a $5.0 billion increase.

On Friday, 09 April, 2010, stocks spent the majority of the session broadly higher, but overall gains were held in check amid persistent wariness about the financial health of Greece. Fitch Ratings on Friday downgraded Greece's credit ratings to the lowest ring of investment-grade ratings, BBB minus. A downgrade for Greece heightened concerns about the euro-zone countries and the global economic recovery, thereby affecting commodity prices.

On that day, the Dow Jones Industrial Average ended higher by 70.28 points at 10,997.35. Nasdaq ended higher by 17.24 points at 2454.05. S&P 500 ended higher by 7.93 points at 1194.37. All ten economic sectors ended higher for the day led by energy, telecom and consumer discretionary sectors.

Despite pronounced weakness in the dollar, gains in the broader market remained contained until the close came within reach. However, a late surge in buying sent stocks to fresh 52-week highs in the face of suggestions that the stock market is near-term overbought. The Dow even kissed 11,000, but it settled just a few points below that psychological line.

Advancing issues outnumbered decliners in the Dow by 4-to-1. Chevron was the main Dow winner for the day after it issued an interim update. On the other hand, Alcoa was the main laggard after the company received a downgrade at JP Morgan Chase.

Crude oil prices dropped for the third straight day on Friday, 09 April 2010. Prices pared all its early gains due to demand concerns as concerns regarding global recovery resurfaced once again and as the dollar weakened.

On Friday, crude-oil futures for light sweet crude for May delivery closed at $84.92/barrel (lower by $0.55 or 0.5%). During intra day trading, prices rose to a high of $86.45. For the week, crude ended higher by just 0.6%. For the month of March, crude rose 5.1%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is higher by 6.8%.

In the currency market on Friday, the dollar index, which measures the strength of the dollar against basket of six other currencies fell by almost 0.4%. The dollar index gained about 0.7% in March and rallied 4% during the first quarter. The dollar index has gained 5% this year till date.

Elsewhere, natural gas for May delivery gained 16 cents, or 4.1%, to settle at $4.07 per million British thermal units. Prices have gained 0.8% for the week.

Indian ADRs ended mixed on Friday. HDFC Bank and ICICI Bank were main winners soaring 2.3% and 2.2% respectively. Tata Motors too gained 3.2%.

For the year, Dow, Nasdaq and S&P 500 are higher by 5.5%, 8.1% and 7.1% respectively.

Looking ahead to next week, the first quarter earnings season will kick off with a number of big names, including Alcoa, Intel, JPMorgan Chase, Google, Bank of America and General Electric. The economic calendar will be busy later in the week, with CPI, Retail Sales and the Fed's Beige Book on Wednesday and Industrial Production on Thursday.