US stocks traded in the green for the first half of the day on Wednesday, 21 October, 2009. But a late hour selling effort pushed stocks back to the wall and stocks ended the day with quite some losses. Despite better than expected earning reports from a few financial firms, the good mood failed to prevail for long. Crude prices ended substantially higher today.
The Dow Jones Industrial Average ended lower by 92.12 points at 9949.36. Nasdaq ended lower by 12.74 points at 2150.73. S&P 500 shed 9.66 points at 1081.4.
Nine of ten sectors ended in the red led by financials, consumer discretionary and materials sectors. Utilities were the only one to end with little gains.
Stocks at Wall Street looked poised to start the session today on strong footing and traded in the green for the entire first half. But then, an aggressive selling effort in the final hour of trade took the stock market from a solid gain to a considerable loss. The downturn was broad based and left many of the major sectors to settle at session lows.
Early gains were led by the financial sector on the heels of Morgan Stanley and U.S. Bancorp. Both companies posted better-than-expected earnings. Wells Fargo also topped the consensus earnings estimate for its latest quarter. But the financial sector's strength faded since the early going, causing the broader market to hand back some of its gains as it eases off of its session highs, which were reached midmorning. Energy stocks emerged to show considerable strength, however.
Health care stocks struggled today for entire day. Eli Lilly had showed strength ahead of the opening bell, due to better-than-expected earnings results and an increased earnings outlook for fiscal 2009.
As per latest report from Fed's Beige Book, the Beige Book stated that most sectors are stabilizing or seeing modest improvement, but commercial real estate is one of the weakest sectors. Consumer spending remained weak in most areas. That point comes in connection with word that labor markets are weak or mixed, though there are pockets of improvement.
Crude prices ended substantially higher at Nymex on Wednesday, 21 October, 2009. Prices rose as energy department today reported les thane expected buildup in crude inventories for last week. The slipping dollar also aided to crude's rise. On Wednesday, crude-oil futures for light sweet crude for December delivery closed at $81.37/barrel (higher by $2.25 or 2.8%). Earlier during the day, it rose to a high of $82. 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 18%.
EIA reported today that crude inventories rose 1.3 million barrels in the week ended 16 October. Market was expecting a buildup figure to the tune of 2.2 million barrels. Imports fell to 8.7 million barrels a day in the latest week. The EIA also reported that petroleum demand remained weak, with demand for gasoline falling to the lowest level in more than five months.
The report also stated that gasoline inventory declined by 2.3 million barrels and the decline was 800,000 barrels for distillates, which include heating oil and diesel.
In the currency market on Wednesday, the dollar index, which calculates the strength of the dollar against a basket of six other currencies fell by almost 0.8%.
Barring Rediff.com, all Indian ADRs ended in the red. ICICI Bank and MTNL were the largest losers shedding 4% and 4.7% respectively.
Tomorrow, there are a couple of economic data expected. Initial claims data and continuing claims data are the main ones. A few earning reports are also expected though.
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