US stocks ended in a mixed mode on Wednesday, 24 June. Dow registered modest losses while Nasdaq and S&P 500 registered modest gains. Federal Reserve's monetary policy statement was the main highlight of the day today. The major averages were putting in solid gains prior to the release, but the market moved lower afterwards. Other than that, there were a couple of economic reports. Better than expected earning report from Oracle helped Nasdaq register modest gains today.
The Dow Jones Industrial Average ended lower by 23 points at 8,299.73. The Nasdaq Composite Index, ended higher by 27 at 1,792. S&P 500 ended higher by 5.8 points at 900.
The stock market started the day on a strong note. But the stock market sold off sharply midday. The major averages climbed higher toward the end of the session.
All ten sectors ended in the green today led by the technology and financial sectors. 3M, Du Pont, Caterpillar, Merck and Johnson& Johnson were the main Dow winners. Boeing, United Technologies, American Express, Mc Donalds and Exxon Mobil were the main Dow laggards.
The Nasdaq was a leader for most of the day following Oracle's better-than-expected fourth quarter results and upside first quarter earnings per share guidance after the close last night. Other tech stocks like Apple and Intel too supported the Nasdaq today.
Today's FOMC policy statement stated that the pace of economic contraction in US is slowing. It also stated that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period of time. The Fed left the fed funds rate unchanged at 0.00% to 0.25%, as expected.
The FOMC also stated that its Treasury purchase program size remains unchanged. That pressured Treasuries and took the benchmark 10-year Note from positive ground to negative ground and pushed its yield up more than 10 basis points to 3.69%.
Among economic reports for the day, The Commerce Department reported on Wednesday, 24 June, 2009 that durable-goods orders increased 1.8% in May. Stronger orders for airplanes and machinery translated into a better-than-expected 1.8% increase in durable-goods orders in May.
It was the third increase in the past four months for durable-goods orders. Despite the recent increases, however, the level of new orders for big-ticket items during May was down 5.1% from December. Shipments of durable goods fell 2.1% in May and are down 19.3% in the first five months of the year compared with a year earlier.
Inventories of durable goods fell 0.8%. The inventory-to-shipment ratio rose to 1.90 from 1.89, indicating that manufacturers' inventories are getting further out of whack despite massive efforts to cut production and sell off inventories.
In a separate report, the Commerce Department also reported on Wednesday, 24 June, 2009 that sales of new homes in the United States were essentially unchanged near record-low levels in May as home builders continued to slash their inventories of unsold homes.
Sales dropped 0.6% to a seasonally adjusted annual rate of 342,000 in May from a downwardly revised 344,000 in April. Seasonally adjusted sales have been essentially flat since January, when they dropped to a postwar record low of 329,000.
All the Indian ADRs ended in the green today. HDFC Bank and Wipro Technologies were the main gainers rising 3.6% and 3.2% respectively today.
Crude prices at Nymex dropped today after rising initially on Wednesday, 24 June, 2009. Prices fell today as the dollar rallied again. Prices fell despite energy department's weekly inventory report which showed more than expected drop in crude inventories for last week. On Wednesday, crude-oil futures for light sweet crude for July delivery closed at $58.67/barrel (lower by $0.57 or 0.7%). Earlier during the day, it hit a high of $69.86.
In the currency market on Wednesday, the dollar rallied after the Federal Reserve left interest rates unchanged and said it will continue to buy Treasurys and other securities as previously announced. The dollar index, which measures the strength of the dollar against a basket of six other currencies, rose as much as 0.8%. Federal Reserve policy makers began a two-day meeting yesterday. The central bank has held its benchmark interest rate near zero since December.
Tomorrow will again be a day heavy in economic data. Initial unemployment claims for the week ended 20 June and the final first quarter GDP reading are both due at 8:30ET.
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