US stocks ended with strong gains on Thursday, 08 October, 2009. This was the fourth consecutive day of gains for stocks. There were several factors ranging from good earning report, economic report to weak dollar that spurred today's rally. Though, indices failed to stick to their intra day highest gains of the day, they manages to end with strong gains.
The Dow Jones Industrial Average ended higher by 61.29 points at 9,786.87. The Nasdaq Composite Index, ended higher by 13.6 points at 2,123.93. S&P 500 ended higher by 7.9 points at 1065.48. During session highs, Dow was more than 100 points up.
Eight of the ten economic sectors ended in the green led by energy, materials and consumer discretionary sectors. Telecom and healthcare were the main laggards.
3M, American Express, Chevron, Caterpillar, Home Depot and Microsoft were the main gainers today. Travelers, Coco Cola, AT&T, Verizon, IBM and Pfizer were the main laggards.
Materials stocks were today helped by a better-than-expected quarterly report from Dow component Alcoa. Alcoa's surprise profit and relatively upbeat outlook has helped take the stock to fresh 2009 highs.
Retailers were also out with some positive announcements. Though many of them continued to see softer sales, the declines haven't been as bad as they were in past months, nor have they been as bad as expected.
Stocks in the broader market have also been helped by the latest initial jobless claims data. The Labor Department reported on Thursday, 08 October, 2009 that the number of initial claims filed for state unemployment benefits fell by 33,000 to a seasonally adjusted 521,000 in the week ended 3 October, 2009.
As per the report, it's the fewest initial jobless claims since the first week of January. The four-week average of new claims fell as well, down by 9,000 to 539,750, in what also the lowest since January. Compared with a year ago, initial claims are up 13%, while continuing claims are up 70%. Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs.
In a separate report, August wholesale inventories decreased more than expected, but the report didn't have much of an impact on action.
Crude prices climbed up above the $70 mark at Nymex on Thursday, 08 October, 2009. Prices rose in synchronization with the precious metals and weak dollar. Stronger than expected economic report also boosted crude prices. On Thursday, crude-oil futures for light sweet crude for November delivery closed at $71.69/barrel (higher by $2.12 or 3%). During intra day trading, it rose to a high of $72.55. Last week, crude ended higher by 6%.
In the currency market on Thursday, the European Central Bank, which sets monetary policy for the 16 nations that use the euro, left its key lending rate unchanged at a record low of 1%. The Bank of England did likewise, its key lending rate unchanged at a record-low 0.5%. The dollar index, which measures the strength of dollar against a basket of other currencies, rose by almost 0.3%.
Barring Rediff.com and Punjab Tractors, all Indian ADRs ended with decent gains. Sify and Infy were the main gainers climbing 4.8% and 1.9% respectively.
For tomorrow, the main economic report expected is the trade balance data. Other than that, the earning report from Infosys will garner attention.
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