US stocks end week on a steady note

Most Dow components exceed earning estimates

US stocks registered modest gains for the week that ended on Friday, 22 October 2010. Earning reports poured in full swing this week and there were quite a few big names that reported earnings including twelve major Dow components. Most of the companies exceeded expectations. Other than that, the economic reports too pained a overall steady picture of the economy.



For the week, that ended on Friday, 22 October 2010, Dow ended higher by 69.78 points (0.6%) at 11,132.56. Nasdaq ended higher by 10.62 points (0.4%) at 2,479.39. S&P 500 ended higher by 6.89 points (0.6%) at 1,183.08. It was mainly the financial sector that drove stocks higher during the week.

The financial sector got the boost following optimistic earning reports from quite a few banks and investment firms. Citigroup, American Express, Goldman Sachs and Bank of America all exceeded expectations and the major banks got earnings boosts from lower net charge offs thanks to improving loan performance.

Among the major Dow components that reported earnings, Boeing said it swung to a quarterly profit from a year-ago loss and lifted its outlook. IBM, United Technologies, Honeywell and Coco Cola posted better-than-expected earnings. Caterpillar posted upside results for its latest quarter and issued positive guidance. Intel gained after it said it would invest up to $8 billion over several years to upgrade its manufacturing plants in the U.S. and build a new research facility in Oregon.

Among other earning reports, Internet search outfit Yahoo! reported an upside earnings surprise, but it issued a rather weak forecast.

During the week, China's central bank said it was raising its key lending and deposit rates for the first time in about three years, a move aimed at curbing inflation. The dollar had turned immensely stronger following the news.

On Friday, 22 October 2010, seven out of ten economic sectors ended higher led by energy, technology and consumer discretionary sectors. Both the Dow and the S&P 500 spent the session chopping along near the neutral line, but the Nasdaq staged a strong gain. Better-than-expected earnings from Baidu.com and Amazon.com drove shares of the pair to record highs and helped the pair provide leadership to the Nasdaq.

On that day, the Dow ended lower by 14.01 points at 11,132.56. Nasdaq ended higher by 19.72 points at 2,479.39. S&P 500 ended higher by 2.82 points at 1183.08.

In the currency market on Friday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies rose marginally by almost 0.04%. The stronger greenback, was pushed up earlier this week by comments from U.S. Treasury Secretary Timothy Geithner and a surprise interest-rate hike in China. Traders also waited to hear from South Korea, where finance ministers from the Group of 20 nations gathered.

Crude oil prices ended higher on Friday, 22 October 2010 at Nymex. Prices rose despite the firm dollar. Continuation of a strike at an important oil port in Southern France impacted prices. On Friday, crude oil futures for light sweet crude for December delivery closed at $81.69/barrel (higher by $1.13 or 1.4%). For the week, crude ended lower by 0.3%, its third consecutive weekly losses.

Precious metal prices dropped for second straight day on Friday, 22 October 2010 at Comex. Prices erased earlier gains and fell as the dollar strengthened. With Friday's loss, gold registered first weekly loss in six weeks. On Friday, gold for December delivery ended at $1,325.1 an ounce, lower by $0.50 (0.01%) on the New York Mercantile Exchange. For the week, gold ended lower by 3.4%. December Comex silver futures ended lower by 2 cents (0.1%) at $23.12. For the week, silver ended lower by 4.8%.

Indian ADRs ended mostly mixed on Friday. Wipro slumped by 6.7%. ICICI Bank and HDFC Bank hell by 0.9% and 0.8% respectively. Tata Motors gained 1.1%.

Earnings season will remain in focus this coming week. Other than that, the G20 meet that is taking place this weekend will garner attention.