Technology sector helps US stocks to finish in the green

Murky economic data keeps stocks steady

A late rally lifted US stocks at the end once again on Thursday, 16 September 2010. Stocks spent the entire day lingering in the red. But mixed set of economic data and the technology sector helped two of the major indices finish the day in the green. Bullion metal prices struck record highs. But the market mood remained somber as FedEx announced its plans for another set of layoff.



For the day, that ended on Thursday, 16 September 2010, Dow ended higher by 22.1 points at 10,594.83. Nasdaq ended higher by 1.93 points at 2,303.25. S&P 500 ended lower by 0.41 points at 1,124.66.

Seven out of ten economic sectors ended lower led by utilities, energy, and financial sectors. Technology, materials, and telecom sectors finished higher. Nineteen out of thirty Dow components ended higher led by H-P.

Among economic reports expected for the day, The Labor Department in US reported on Thursday, 16 September 2010 that the number of people who filed new claims for unemployment benefits dipped 3,000 to 450,000 in the latest week. Market had expected initial claims to rise to 460,000 in the week ended 11 September. Claims for last week were revised up by 2,000 to 453,000. The four-week average of initial claims, which is less volatile than the weekly number dropped 13,500 to 464,750.

Traders paid less attention to the August Producer Price Index, which increased 0.4% after a 0.2% increase in the prior month. It was widely expected to climb 0.3% in August. Excluding food and energy, producer prices increased 0.1%, as expected, after a 0.2% increase in the prior month.

Separately, The Federal Reserve Bank of Philadelphia reported manufacturing in the region contracted this month, defying expectations of a rise. Though September Philadelphia Fed Index improved to -0.7 after it had set a 13-month low of -7.7 in the previous month, market participants reacted negatively to the reading since the consensus had called for a reading of 2.0.

A lack of leadership has left stocks mired in the red with modest losses during intra day trading. Financials, frequent leaders of the broader market, had hampered action.

FedEx Corp., the package-delivery giant and economic bellwether, said on Thursday that its fiscal first-quarter profit more than doubled as the global economy strengthened and trade expanded after last year's recession. The company increased its fiscal-year outlook, but weaker profit margins in its core Express and Ground segments and a soft second-quarter forecast made investors nervous. The company also plans to cut 1,700 jobs and close facilities as it combines its freight businesses.

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

Crude oil prices ended lower for third straight day on Thursday, 16 September 2010 at Nymex. Prices continued to stay somber due to weak set of economic data. Prices dropped despite a weak dollar. On Thursday, crude oil futures for light sweet crude for October delivery closed at $74.57/barrel (lower by $1.45 or 1.7%).

Also on Thursday, natural gas prices remained volatile throughout the session, but ended higher, extending their winning streak to a fifth day. Natural gas for October delivery added 7 cents, or 1.7%, to $4.06 per million British thermal units, its best finish in three weeks. Prices hit an intraday low of $3.85, hurt by a Energy Information Administration report showing an increase of 103 billion cubic feet in the nation's storages of natural gas for the week ended 10 September 2010.

Precious metals ended at record highs on Thursday, 16 September 2010 at Comex. Prices struck new record as dollar retreated. Murky economic data also led to higher bullion metal prices today. On Thursday, gold for December delivery ended at $1,273.8 an ounce, higher by $5.1 (0.4%) on the New York Mercantile Exchange. This was by far an all time highest finish for the yellow metal. Before this, last Tuesday, prices had struck a all time new record at $1,271.7. December Comex silver futures ended higher by 20 cents (1%) to $20.77.

Two stocks rose for every three on the decline on the New York Stock Exchange, where just 906 million shares traded.

Indian ADRs ended mixed on Thursday. Tata Motors soared 2.25%. ICICI Bank and Patni Computers slipped by 0.4% and 0.9% respectively.

Tomorrow, the day is light with only one economic report – consumer prices index to be reported. Other than that, no earning reports are expected.