US stocks manage to retain gains

Indices pare most of their intra day gains but manage to end higher

US stocks started the day in the red on Wednesday, 18 August 2010. A modest rally among the technology stocks coupled with strength in the financial sector helped pull the major averages out of their midmorning weakness and stocks started trading with modest gains. Despite their leadership, the rally faded into the close for the second straight session.



For the day, that ended on Wednesday, 18 August 2010, Dow ended higher by 9.69 points at 10,415.54. Nasdaq ended higher by 6.26 points at 2,215.7. S&P 500 ended higher by 1.62 points at 1,094.16. Dow started the day trading lower by 74 points but was trading higher by 62 points at one point during the mid session hours.

Seven out of ten economic sectors ended higher led by consumer discretionary, telecom and technology sectors. Dow components ended mixed. Home Depot led the pack of Dow gainers while Exxon Mobil led the group of Dow decliners.

Among earning data expected for the day, retailer Target overcame a sluggish start to provide leadership after expressing comfort with the consensus earnings forecast for third and fourth quarters. In contrast, Deere posted an upside earnings surprise and issued strong guidance, but its shares fell. Deere's third-quarter earnings rose 47% on a 15% gain in sales, and the company cited strong demand for large farm machinery and improvement in construction and forestry.

In the currency market on Wednesday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.1% after rising initially.

Advancers outpaced decliners on the New York Stock Exchange, where 923 million shares traded hands.

Crude prices dropped again but managed to pare its losses partly on Wednesday, 18 August 2010. Prices fell after energy department reported less than expected drop in crude inventories for last week. Lower dollar also aided in crude paring losses. On Wednesday, crude oil futures for light sweet crude for September delivery closed at $75.42/barrel (lower by $0.35 or 0.5%). During intra day trading, prices fell to a low of $73.75. Yesterday, prices had increased for first time in seven sessions.

The Energy Information Administration on Wednesday reported a smaller-than-expected decline for oil inventories in the week ended 13 August. The EIA said oil inventories declined by 800,000 barrels. The EIA also reported gasoline stockpiles "virtually unchanged" for the week and an increase of 1.1 million barrels for distillates, which include heating oil and diesel.

On Wednesday, gasoline futures for September delivery bucked the trend to post gains of a penny, or 0.4%, to $1.96 a gallon, its highest price in five sessions. Meanwhile, September natural gas declined 3 cents, or 0.7%, to settle at $4.24 per million British thermal units.

Bullion metal prices ended mixed on Wednesday, 18 August 2010 at Comex. Gold prices ended marginally higher while silver prices slipped. Prices fluctuated due o a steady dollar. On Wednesday, gold for December delivery ended at $1,231.3 an ounce, higher by $3.1 (0.3%) on the New York Mercantile Exchange. September Comex silver futures ended lower by 20 cents (1.1%) at $18.39 an ounce.

Indian ADRs ended mixed on Wednesday with more gainers than losers. HDFC Bank and Wipro Tech were the main gainers soaring 4.5% and 1.2% respectively. WNS and Tata Motors were the main losers shedding 2.3% and 1% respectively.

For tomorrow, initial claims and continuing claims are the only economic data are expected. But earning reports will continue to trickle in.