US stocks register substantial weekly gains

Job data checks in better than expected at Wall Street

US stocks registered substantial gains for the week that ended on Friday, 03 September 2010. Better than expected economic data, mainly on the last day of the week sent stocks surging on that day. Other than that, there were major news in the merger and acquisition area. Corporate earnings continued to trickle in and did not disappoint in most cases. The week ended on a positive note following a better-than-expected U.S. employment report.



For the week, that ended on Friday, 03 September 2010, Dow ended higher by 297.28 points (2.9%) at 10,447.96. Nasdaq ended higher by 80.12 points (3.7%) at 2,233.75. S&P 500 ended higher by 39.92 points (3.7%) at 1,104.87.

All ten economic sectors ended higher led by financial, materials and consumer discretionary sectors.

Economic data acted remained the main newsmaker for the week. The Commerce Department in US reported on Monday, 30 August 2010 that savings rate for U.S. households fell in July to the lowest level in three months as spending outpaced income. Consumer spending rose 0.4% in July while personal income increased 0.2%. The savings rate fell to 5.9% from 6.2% in June, which had been the highest level in a year.

Among notable earning announcements, Monsanto issued a tepid revenue forecast.

In the merger related area, Intel announced plans to acquire the wireless unit Infineon Technologies for $1.4 billion in cash. Another Dow component, 3M announced that it will pay for $430 million, or $10.50 for each share of Cogent.

Meanwhile, drug maker Sanofi-Aventis offered $18.5 billion in cash to acquire Genzyme. Genzyme immediately rejected the offer as inadequate. Exelon announced it will acquire the renewable energy unit of Deere & Co. in a deal valued at some $900 million.

On Friday, 03 September, 2010, stocks ended the day substantially higher. Thanks to better-than-expected data, the mood among market participants has improved drastically and stocks registered gains for third straight day.

On that day, the Dow Jones Industrial Average ended higher by 127.83 points at 10,447.93. Nasdaq ended higher by 33.74 points at 2233.75. S&P 500 ended higher by 14.41 points at 1,104.51. All ten sectors ended higher led by financial, technology and consumer discretionary sectors.

The Labor Department in US reported on Friday, 03 September 2010 that the U.S. economy shed 54,000 nonfarm jobs in August, much smaller than an expected figure of 1,00,000. The unemployment rate ticked higher to 9.6% in August from 9.5% in the previous month.

The report also showed that the payrolls count in June and July was revised higher by a cumulative 123,000. Payrolls fell a revised 175,000 in June and by 54,000 in July.

Separately, the Institute for Supply Management in US reported on Friday, 03 September 2010 that growth slowed in the U.S. non-manufacturing sector in August, with a key index hitting 51.5%, compared with 54.3% in July. Market had expected a reading of 53.5%. A reading above 50% indicates expansion, while a reading below 50% indicates a contraction.

Despite a better than expected job report, crude prices ended lower on Friday, 03 September 2010 at Nymex. Prices ended lower even though dollar weakened and economic reports checked in better than expected. On Friday, crude oil futures for light sweet crude for October delivery closed at $74.6/barrel (lower by $0.42 or 0.6%). For the week, crude ended lower by 0.8%.

Also on Friday, natural gas for October delivery added 19 cents, or 5%, to $3.94 per million British thermal units. That pushed weekly gains to 8%. The weekly advance didn't make up for the previous week's loss of 11%.

Precious metals ended mixed on Friday, 03 September 2010 at Comex. Silver prices rose to two-year highs and gold prices fell from its two month highs. Gold prices fell as the job report at Wall Street checked in better than expected thereby decreasing the appeal of precious metals as an alternate investment. On Friday, gold for December delivery ended at $1,251.1 an ounce, lower by $2.3 (0.2%) on the New York Mercantile Exchange. Prices fell from two-month high levels. For the week, gold ended higher by 1%, up for fifth consecutive week. December Comex silver futures ended higher by 28 cents (1.4%) to $19.95. It was silver's highest close since March 2008, when it closed at 19.89 an ounce. For the week, silver ended higher by 3.8%.

In the currency market on Friday, the dollar index fell by 0.5%.

Indian ADRs ended mostly higher on Friday. Wipro Technologies and HDFC Bank were the main gainers soaring 3.5% and 1.3% respectively.

For the year, Dow is higher by 0.2%. Nasdaq is lower by 1.6% and S&P 500 is lower by 0.9%. US Markets will be closed on Monday due to Labor Day holiday.