US Market registered modest losses for the second consecutive day today, Tuesday, 04 December, 2007. Disappointing guidance from Merck and JPMorgan trimming its earnings estimate on a number of brokerage firms weighed on investor sentiments today. Nine out of ten economic sectors posted losses led by Financials.
The Dow Jones industrial Average ended the day with a loss of 65.84 points at 13,248.73. The Nasdaq Composite Index, finished lower by 17.3 points at 2,619.83. S&P; 500 finished lower by 9.63 points at 1,462.79.
Twenty-one out of thirty Dow stocks ended in red today. General Motors, AIG, Citigroup, JP Morgan and American Express led the group of Dow laggards. Wal-Mart, IBM and Verizon were a few of the Dow gainers.
Dow component Merck announced full-year earnings guidance for 2007 and 2008 that were below analysts' estimates. Further fuel was added to this news by Finland-based Nokia. The company announced that it sees the average price of cell phones falling. The company also said it expects global handset demand to grow about 10% next year.
JPMorgan cut its earnings estimate on the four largest securities firms on Wall Street- Merrill Lynch, Morgan Stanley, Goldman Sachs and Lehman Brothers.
Indian ADRs close mixed
The loss of leadership from the financial sector weighed heavily on the broader market today. Indices stayed in the red for almost the entire day.
Indian ADRs closed mixed today. Wipro Tech and Satyam were a couple of gainers registering 3.8% and 2.8% gains respectively.
Crude prices slipped by almost a dollar today after traders were almost certain that OPEC will take the decision to increase production in early 2008 in tomorrows meeting at Abu Dhabi. The cartel, which produces 40% of worlds total crude, have been doing some mixed talks since the past few days. Reports that Iran has halted its nuclear weapons program four years ago also weighed on oil prices.
Crude-oil futures for light sweet crude for January delivery closed at $88.32/barrel (lower by $0.99/barrel or 1.11%) on the New York Mercantile Exchange. Prices reached a high of $99.2 on 21 November. Prices are up 41% from a year ago.
Trading volumes showed 1.3 billion shares trading on the New York Stock Exchange and 2.0 billion trading on the Nasdaq Stock Exchange. Declining stocks topped gainers by 2 to 1 on both the NYSE and on the Nasdaq.
Tomorrow, investors will focus on a number of economic reports to set the tone of trading. Productivity and Costs report is expected to shed light on how well productivity gains are offsetting wage induced inflation. Factory Orders will provide the latest data in manufactured goods. The Institute for Supply Management is also scheduled to release its non-Manufacturing Survey.
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