Bulls back in action in a volatile US Market

Boeing and General Motors together with financial stocks help in turning around investor sentiments

US Market succeeded in getting back some of its confidence today, Monday, 30 July, 2007 after suffering its worst weekly loss in four years last week. Bulls were back in action today after Financial sector, which was worst hit last week, provided bulk of support today. The Dow, S&P 500, and Nasdaq had plunged 4.6% on average last week on problems related to credit crunch and housing sector.

A sense that such a sizable sell-off was overdone last week prompted some bargain-hunting interest today. But after some volatility and initial few hiccups, a surprise upgrade on Morgan Stanley�s credit rating, was the initial catalyst restoring confidence on Wall Street.

The Dow Jones Industrials Average today rose by 92.84 points to close at 13358.31. Tech heavy Nasdaq rose 21.04 points to close at 2583.28. S&P 500 added 14.96 points to its kitty to close at 1473.91.

Twenty-four out of the thirty Dow stocks closed in green today. General Motors, Home Depot, Boeing and Caterpillar headed the list of the Dow winners. Verizon and IBM were a couple of the Dow laggards.

Boeing was up almost 2% today after the company raised its estimate of the potential for airliner sales in India and said it sees India orders reaching $86 bln over the next 20 years. It accounted for almost 17 points in Dow�s gains.

All investment banking stocks close higher

After opening modestly higher across the board, stocks turned negative as investors thought that a possible credit crunch will substantially slow the record pace of M&A activity.

The absence of leadership from the next two most influential sectors - Technology and Health Care also contributed to the market's lack of direction.

But Standard & Poor's upgrade of Morgan Stanley helped investment banking stocks considerably today. Morgan Stanley, together with competitors Goldman Sachs, Merrill Lynch, Lehman Brothers, Bear Stearns closed higher today.

A turnaround in the Financial sector, despite a modest increase in bond yield, had the most noticeable impact on the market's improved stance today. JP Morgan and Citigroup also closed higher.

GM, the main Dow winner today, to announce earnings tomorrow

Crude oil futures registered modest loss today and closed below $77/bbl after crossing $77/bbl during intra day trading hours. Prices fell on speculation that U.S. fuel stockpiles increased last week. Crude-oil futures for light sweet crude for September delivery closed at $76.83/barrel (lower by $0.19/barrel or 0.25%) on the New York Mercantile Exchange.

On the NYSE, advancing issues topped those declining by nearly 2 to 1, and 17 to 13 on the Nasdaq. More than 2 billion shares were traded on the NYSE, while 2.3 billion were exchanged on the Nasdaq.

A host of economic data will set the tone of trading for tomorrow. Personal Income, Spending, and the Core PCE Price Index are to be released tomorrow. Also garnering notable attention will be the Q2 Employment Cost Index. That will be followed by Chicago PMI at 9:45 ET and Construction Spending and Consumer Confidence at 10:00 ET.

Among earnings reports expected tomorrow, Dow component General Motors is the most important name among a host of other names.