US Market gains back all of last Friday’s loss

Financial stocks provide major boost to the indices

Financial stocks, which were hit hard since past few weeks, brought bargain hunting back in Wall Street today, Monday, 6 August, 2007. After a full day of volatile trading but staying in positive territory for major part of the day, the Dow Jones Industrial Average (DJIx) rose by more than two hundred points in the final couple of hours of trading.

At the day’s close, Dow turned in its biggest point gain since October 2002. The Dow Jones Industrials Average today rose by 287 points at the end to close at 13468. Tech-heavy Nasdaq gained 36 points to close at 2547. S&P 500 added 34 points to close at 1467.

Twenty-nine out of the thirty Dow stocks closed in green after Boeing also inched up in the green territory in the final few minutes of trading. AIG, Citigroup, American Express, Altria and P&G were the main Dow winners. Alcoa was the sole Dow loser after metal prices fell today.

Bear Stearns spiked into positive territory about an hour before the close, following upbeat analyst commentary helped exacerbate the rebound in brokerage stocks.

Wal-Mart surges on joint venture news in India

When market opened in the morning, last week’s sizable downturn gave investors an early buying opportunity. Renewed enthusiasm in the battered financial sector provided the bulk of early support. An analyst upgrade on Merrill Lynch was the driving catalyst.

During mid-day, of the eight sectors trading higher, Consumer Staples paced the way, but the noteworthy surge in Financials continued to provide the bulk of intraday support.

The indices continue to climb going into the close as buying remained widespread across most areas. The Financial sector recouped all of the 4% it had surrendered last Friday.

Merck shares today gained 2.1% after an upgrade on the stock. Wal-Mart Stores rose 3.3% after saying it is setting up a joint business-to-business venture in India.

Energy sector fails to participate in today’s rally

But the Energy sector continued to be the market's only big blemish today and failed to participate in today’s rally. Slipping crude prices was the main reason for this.

Crude oil futures had a major fall today after traders started to worry about a slowdown of US economic growth. Traders continued to panic from last Friday’s weaker than expected job numbers. Dissipating hurricane fears in the Atlantic also softened crude prices today. Crude-oil futures for light sweet crude for September delivery closed at $72.06/barrel (lower by $3.42/barrel or 4.53%) on the New York Mercantile Exchange.

Trading volumes showed 2.2 billion shares exchanging hands on the New York Stocks Exchange and 2.8 billion shares trading on the Nasdaq stock market. Gaining issues topped decliners by 17 to 15 on the NYSE, while decliners topped gainers by 8 to 7 on Nasdaq.

Tomorrow’s key event is the Federal Reserve meeting which will conclude at 14:15 ET. The Fed is widely expected to leave the fed funds rate unchanged at 5.25% again but some section of the market is hopeful for a cut, given the recent crash in the market. Cisco Systems will lead the list of earnings reports out after the close.