US stocks manage to hold on to gains

Weaker than expected housing data push stocks lower during mid day trading

US stocks managed to end modestly higher on Monday, 19 July 2010. After making a strong start, stocks slipped after a couple of hours of trading due to a weaker thane expected housing sector report. Then, stocks once again picked up momentum as traders anticipated that companies will report better than expected earning report in the current quarter.



For the day, that ended on Monday, 19 July 2010, Dow ended higher by 56.53 points at 10,154.43. Nasdaq ended higher by 19.18 points at 2,198.23. S&P 500 ended higher by 6.37 points at 1,071.25. Dow was trading lower by 13 points at one point of time.

All ten economic sectors ended higher led by consumer discretionary, energy and healthcare sectors. Twenty-two of thirty Dow components ended higher led by Intel and Boeing. Bank of America led the pack of decliners.

Intel Corp led the Dow with a 2.7% gain. Reuters cited a source close to the Federal Trade Commission reporting Intel had reached an initial agreement with the agency that will give it less flexibility in marketing its products but not cost it any money. Boeing shares added 2.1% after the jet maker disclosed a pair of big orders from Emirates and General Electric.

Bank of America Corp. fell the most among the blue chips, down 2.7% after analysts at Goldman Sachs trimmed their outlooks for the bank after reviewing its earnings released last week.

In the earnings space, stronger-than-expected earnings report came from Halliburton that sparked buying in the energy space. Earnings reports from Hasbro and Delta Airlines beat analysts' earnings per share estimates, but missed on revenues.

Crude oil prices ended higher on Monday, 19 July 2010 at Nymex but were off their session highs. On Monday, crude oil futures for light sweet crude for August delivery closed at $76.54/barrel (higher by $0.53 or 0.7%). During intra day trading, prices rose to a high of $77.73. Last week, prices gained 1.1%.

Crude prices could not sustain the intraday high after a report showed home builders in July grew more pessimistic about industry conditions as a federal tax credit for home buyers expired. The National Association of Home Builders/Wells Fargo housing market index fell to 14 in July from a downwardly revised 16 in June.

The Labor Department in US reported last Friday, 16 July 2010 that U.S. consumers prices for goods and services fell slightly in June, mainly because of lower gasoline costs. The consumer-price index dropped a seasonally adjusted 0.1%, the third straight monthly decline. The closely followed core rate, seen as a better gauge of inflationary trends, rose 0.2% for the biggest gain since October 2009.

The biggest decrease in consumer prices in June occurred in energy, mostly gasoline for autos as well as electricity. Energy prices fell 2.9% for the second month in a row.

In the currency market on Monday, the dollar index, which measures the strength of the dollar against a basket of six other currencies rose by 0.2%. But the dollar slipped against the euro.

Bullion metal prices ended lower on Monday, 19 July 2010 at Comex. Prices continued with their last week's losses after inflation issues continued to grip the market thereby reducing the appeal of precious metals. The strong dollar also aided in slipping bullion metal prices.

On Monday, gold for August delivery ended at $1,181.9 an ounce, lower by $6.3 (0.5%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 1.7%. On Monday, September Comex silver futures ended lower by 25 cents (1.4%) at $17.54 an ounce.

Trading volume was light on Monday. For every stock on the decline nearly two were rising on the New York Stock Exchange, where nearly 956 million shares traded hands.

Indian ADRs ended mixed on Monday. HDFC Bank and Wipro Technologies were the main gainers adding 2.3% and 1.9% respectively. WNS slipped 3.4%.

A number of earning reports are expected after today's close. The key names are IBM and Texas Instruments