In the US stock market on Tuesday, 03 September, stocks ran out of gas in the second half. Stocks at Wall Street made a great start during the day and Dow rose by almost 200 points at one point. But lackluster economic reports and commodity prices slipping to new lows weighed on investor sentiments and all three indices posted modest losses for the day.
The Dow Jones industrial Average ended the day with a loss of 26.63 points at 11,516.92. The Nasdaq Composite Index, finished lower by 18.28 points at 2,349.24. S&P; 500 finished lower by 5.25 points at 1,277.58.
Eleven out of thirty Dow stocks ended in the red led by Alcoa. GM was one of the Dow winners.
Among economic news of the day at Wall Street, the August Institute of Supply Management (ISM) Index, a national manufacturing survey, indicated a very slight contraction in the manufacturing sector, although it is still indicative of growth in the overall economy. Specifically, the index slipped 0.1 to 49.9, which was nearly in-line with the expected reading of 50. A reading below 50 reflects contraction in manufacturing. On a positive note, the prices paid index declined to 77.0 from 88.5, suggesting an easing in inflationary pressures.
Separately, July construction spending showed a continued poor trend. Housing remains the weakest area in the economy, although Briefing.com expects a leveling off in the months ahead. Specifically, construction spending fell a larger-than-expected 0.6%, versus the expected 0.4% decline. However, the current level of spending is actually above estimates after the June change was revised sharply higher to +0.3% from -0.4%.
The drop in commodity prices sparked selling interest within commodity producing stocks. The drop in energy sector and the materials sector acted as a major drag on the broader market.
Google led the technology sector today as the search engine giant was supposed to release a Web browser later today. The browser stands to take some of the majority market share away from Microsoft's Internet Explorer. Presumably, Google's browser will help increase the company's search engine traffic.
Indian ADRs ended mixed today. HDFC Bank and ICICI Bank were the largest gainers soaring 5.2% and 5.6% respectively.
At the crude market on Tuesday, crude-oil futures for October fell $5.75 (5%) to $109.71 a barrel. Earlier, the price touched $105.46, the lowest since April, 2008. Commodities tumbled the most since March today, led by energy prices, as Hurricane Gustav spared U.S. Gulf petroleum rigs the destruction caused by Katrina and Rita in 2005.
At the currency markets on Tuesday, a sharp fall in oil prices and rising worries about the economic outlook in Europe and Asia boosted the U.S. dollar. The dollar rose to its highest in almost seven months against the euro. The dollar index, a measure of the greenback against a trade-weighted basket of currencies, was 0.9% higher at 78.02.
Volume topped 1.1 billion on the New York Stock Exchange, with advancers ahead of decliners 8 to 7. On the Nasdaq, more than 791 million shares were exchanged, and advancers just passing decliners.
For tomorrow, there are only a handful of companies scheduled to report earnings results before tomorrow morning's opening bell. Other than that, August Auto sales data are scheduled for tomorrow's release. As for official economic data, July factory orders are due.
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