US stocks ended with modest losses on Tuesday, 20 October, 2009. Despite positive earning surprises stocks failed to stick to their earlier gains and finally ended lower for the day. The relatively strong dollar was mainly responsible for this.
The Dow Jones Industrial Average ended lower by 50.71 points at 10,041.48. Nasdaq ended lower by 12.85 points at 2163.47. S&P 500 shed 6.85 points at 1091.06.
Nine of ten sectors ended in the red led by consumer staples, materials and utilities sectors. Technology sector was the only one to end flat.
Among economic reports expected for the day, The Commerce Depart in US reported today that housing starts rose 0.5% to an annual rate of 590,000 in September, 2009. It was much below that market forecast.
Among other reports, the Producer Price Index for September made a surprise month-over-month drop of 0.6%, while core producer prices made a surprise 0.1% slip.
Stocks looked initially as if they would extend the previous session's gain on the heels of positive earnings announcements from Apple, Texas Instruments, Caterpillar, Pfizer and UnitedHealth. Among these, Texas Instruments, Pfizer and United Healthcare even issued upside earnings forecasts. But a stronger dollar put a damper on things.
In the currency market on Tuesday, the dollar initially came under further pressure after the Federal Reserve Bank of New York clarified yesterday that it has been testing reverse-repurchase agreements for technical reasons, and that the tests shouldn't be seen as hints of a tighter monetary policy, which might ordinarily be bullish for the U.S. currency. The dollar index, has dropped 7% this year. The dollar index, which measures the strength of dollar against a basket of six other currencies, fell to a fourteen month low this year. But at the end, dollar index climbed by 0.4%.
Crude prices ended marginally lower at Nymex on Tuesday, 20 October, 2009. Prices dropped for the first time in nine sessions. Prices rose earlier in the day but then pared its gains as traders anticipated that crude's recent rally was overdone.
On Tuesday, crude-oil futures for light sweet crude for November delivery closed at $79.08/barrel (lower by $0.52 or 0.7%). Earlier during the day, it rose to a high of $80.05. Last week, crude ended higher by 9.4%, the biggest weekly gain in two months. In the past two weeks, crude has climbed up by almost 14%.
Barring MTNL, all Indian ADRs ended in the red. HDFC Bank and ICICI Bank shed 2.6% and 1.3% respectively.
Tomorrow, there are no economic data expected. A few earning reports are expected though.
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