US Market ended once again mixed today, Tuesday, 29 April, 2008 with only the Nasdaq managing to eke out little gains. Traders were a bit hesitant in todays trading, a day ahead of the crucial Federal Open Market Committee meeting. The first quarter advanced GDP reading is also expected tomorrow. Four of the major economic sectors finished the session in positive ground, ie consumer discretionary sector, consumer staples, telecom and technology sectors.
The technology sector managed to end in the green today due to an upbeat earning report from Corning. The companys first quarter profit tripled due to LCD sales.
The market kicked off the day in a flat note. It traded in the red for almost the entire first half. At the end, The Dow Jones industrial Average ended with a loss of 39.8 points at 12,831.98. The Nasdaq Composite Index, finished higher by 1.7 points at 2,426.3. S&P; 500 finished lower by 5.4 points at 1,390.9.
Eighteen out of thirty Dow components ended in the red today. Merck was the main Dow loser. The companys share slipped by more than 10% today.
Shares of Merck were badly hammered today after Food and Drug Administration rejected its cholesterol drug Cordaptive, one of the key drugs in its pipeline.
On the earnings front, credit card processors Visa and MasterCard both reported their quarterly earnings. Visa topped its estimate by 17%, while MasterCard beat by 30%. Shares of Visa were sharply lower initially but went up after traders embraced MasterCard's large beat. Shares of Mastercard went up by 13%.
Among major economic report of the day, the Conference Board said April consumer confidence fell to 62.3 from 65.9, marking the lowest consumer confidence in roughly five years. The number, however, is better than expected market projected the reading to slip to 61.
Crude prices dropped by more than $3 today as supply concerns eased. BP restarted a North Sea oil pipeline and the dollar strengthened, reducing the appeal of commodities to investors. Gloomy economic news in the U.S. and forecasts that U.S. crude inventories have gained for a second week also weighed on Tuesday's oil prices. Crude-oil futures for light sweet crude for June delivery closed at $115.63/barrel (lower by $3.12/barrel or 2.6%) on the New York Mercantile Exchange. It fell to an intraday low of $114.95 earlier.
As per BP, it expects to resume normal throughput at its 700,000 barrel-a-day Forties crude oil pipeline system in the North Sea within several days. The company closed the Forties Pipeline System, carrying 40% of the U.K.'s oil production, after a strike at the Grangemouth refinery in Scotland cut power supplies.
In the currency market today, the U.S. currency headed for its first monthly advance this year against the euro as traders increased bets the Fed will stop lowering bank-borrowing costs after cutting the benchmark federal funds rate by 25 basis points tomorrow. The Federal Reserve's interest-rate meeting begins Tuesday afternoon. The statement will be released on Wednesday at 2:15 p.m. E.T. The dollar index, which tracks the performance of the greenback against a basket of other major currencies, gained 0.3% to 72.83.
For tomorrow, the advanced first quarter GDP reading is due before market opens. It will be of utmost importance as there is speculation whether the economy posted negative growth during the first quarter. The major report garnering attention will be the FOMC policy decision, which is scheduled to be announced mid-afternoon 2:15 PM ET. On the earnings front, Colgate-Palmolive, General Motors, Procter & Gamble and Time Warner all scheduled to report before market opens.
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