US stocks stay steady for the week

Energy sector and Chinese data impart good momentum to US stocks

US stocks ended almost near the unchanged mark by registering little gains for the week that ended on Friday, 10 September 2010. The holiday-shortened week did not have much of corporate news and economic reports. The week ended on a positive note following a better-than-expected initial claims data and higher crude oil prices. Banks were in focus throughout the week.



For the week, that ended on Friday, 10 September 2010, Dow ended higher by 14.84 points (0.1%) at 10,462.77. Nasdaq ended higher by 8.73 points (0.4%) at 2,242.48. S&P 500 ended higher by 5.04 points (0.5%) at 1,109.55.

Seven out of ten economic sectors ended higher led by healthcare and industrial sectors. Utilities sector was the sole laggard.

The latest Beige Book from the Fed during the week indicated that five western districts reported modest growth, while a limited number of eastern districts saw improvement and some Midwestern districts saw mixed data. The Beige Book also indicated that consumer caution has governed discretionary purchases, but that consumer spending has increased, on balance.

The Labor Department in US reported on Thursday that initial jobless claims for the week ended 4 September totaled 451,000, which is down 27,000 week-over-week and less than the 470,000 claims that had been expected. Also, continuing claims came in at 4.48 million, which was a greater tally than the 4.45 million that had been widely expected. Continuing claims were essentially unchanged week-over-week.

As for other data, the U.S. trade deficit for July improved to $42.8 billion from $49.8 billion. It was widely expected to come in at $47.3 billion.

The week also witnessed stories that Deutsche Bank is considering a stock offering. The proceeds are expected to be used to increase the bank's stake in German Retail bank Postbank and to bolster capital levels ahead of new regulatory requirements expected in next week's release of Basel III.

There was not much in the way of corporate news during the week. Oracle announced that Mark Hurd, former Hewlett-Packard head, has joined the company as a co-President.

On Friday, 10 September, 2010, stocks ended the day modestly higher. Stocks got off to a slow start, but pushed higher throughout most of the session following a better-than-expected July wholesale inventories report. Friday's gains marked the sixth time in seven September sessions that the major indices have recorded gains.

On that day, the Dow Jones Industrial Average ended higher by 47.53 points at 10,462.77. Nasdaq ended higher by 6.28 points at 2242.48. S&P 500 ended higher by 5.37 points at 1,109.55. U.S. stocks and oil futures advanced on Friday, helped by China trade data and a raised demand forecast from the International Energy Agency. Nine out of ten sectors ended higher led by energy, healthcare, and consumer discretionary sectors. Utilities sector was the sole laggard.

In the currency market Friday, the dollar rose against the yen but fell against the euro and so-called commodity currencies such as the Australian dollar.

Crude oil prices zoomed up on Friday, 10 September 2010 at Nymex. Prices ended substantially higher as International Energy Agency raised its forecast for global oil demand in current year. Positive trade data from China and Japan also aided in rising crude oil prices.

On Friday, crude oil futures for light sweet crude for October delivery closed at $76.45/barrel (higher by $2.2 or 2.9%). For the week, crude ended higher by 2.5%.

On Friday, the International Energy Agency said that it had increased its forecast for global oil demand this year by 50,000 barrels a day, while holding its forecast for next year.

Positive economic data from China and Japan also lifted crude prices. Japan raised its second quarter growth figures. Separate data showed that China's August imports were up 35.2% year-on-year to $119.27 billion, against a 25% increase expected. Crude imports also increased significantly. Exports climbed 34.4% to $139.3 billion, against an expected 35% increase.

Among other energy products on Friday, gasoline futures for October delivery climbed 4 cents, or 2%, to $1.973 a gallon and advanced 2.8% for the week. October heating oil futures also rose 4 cents, or 1.7%, to $2.10 a gallon, up more than 2% for the week.

Also on Friday, natural gas for October delivery rose 11 cents, or 3.1%, to $3.88 per million British thermal units. Natural gas fell 1.5% for the week.

Precious metals ended lower on Friday, 10 September 2010 at Comex. Prices dropped as investors turned focus towards equities and oil thereby reducing the appeal of precious metals. Gold drew only limited support from the Bangladesh central bank's purchase of about $403 million in gold from the International Monetary Fund.

On Friday, gold for December delivery ended at $1,246.5 an ounce, lower by $4.4 (0.4%) on the New York Mercantile Exchange. During the day, it fell to a low of $1,237.9. Earlier, during the week on Tuesday, gold had touched a new all time high of $1,259. For the week, gold ended lower by 0.4%. On Friday, December Comex silver futures ended lower by 1 cent (0.1%) to $19.845. For the week, silver ended lower by 0.5%.

Indian ADRs ended mostly higher on Friday. VSNL was the main gainer soaring 1.2%. Other than that, HDFC bank and ICICI Bank rose 0.9% each.

For the year, Dow is higher by 0.3%. Nasdaq is lower by 1.2% and S&P 500 is lower by 0.5%.