After a full day of volatile trading, US Market managed to end higher today, Wednesday, 12 December, 2007. Federal Reserve came out with some new plans about injecting some more liquidity in the concerned credit markets. Eight out of ten sectors ended higher today led by telecom and energy. Crude oil prices soared by more than $4/barrel today, registering the highest one day increase since January, 2007.

Market was up by almost 270 points earlier during the day. But one hour before closing bell was to ring, Dow was trading almost 100 points lower. But in the final minutes of trading, indices managed to inch up in the green. The Dow Jones industrial Average ended the day with a gain of 41 points at 13,473. The Nasdaq Composite Index, finished higher by 18.8 points at 2,671.14. S&P; 500 finished higher by 8.94 points at 1,486.59.

Nineteen out of thirty Dow stocks ended in green today. 3M, and AT&T; were the main Dow winners. Citigroup and Boeing were a couple of main Dow laggards.

The Federal Reserve announced today that it will be coordinating with the Bank of Canada, Bank of England, European Central Bank, and Swiss National bank to add liquidity through term funds auctions and foreign exchange swap lines. The idea is to add enough resources to the financial system that banks and other lenders are willing to make loans of all kinds so that the economy can function properly. The news was cheered by investors and stocks went substantially higher.

Yesterday, Fed lowered the federal funds rate by a quarter-point to 4.25%. The Fed also lowered its discount rate, the interest it charges on direct loans it makes to banks, by a quarter-point to 4.75%. It was Feds third rate cut in the past three meetings.

But there were a spate of bad news in the financial sector today that took market lower and indices just managed with modest gains at the end. JPMorgan Chase, Bank of America and Wachovia were downgraded at Merrill Lynch based on credit risks.

Spate of bad news in financial sector weigh on market

3M tried supporting Dow considerably today after the company said that it anticipates double-digit earnings growth in 2008, resulting in a profit forecast that exceeded Wall Street's estimate.

But again in the financial sector, Bank of America announced that it expects quarterly results to be disappointing. Wachovia also said it now expects fourth quarter 2007 provision expense to be $1 billion higher than charge-offs.

Top of it, SLM Corp, better known as Sallie Mae, guided fourth quarter and FY2008 earnings below the current consensus estimate.

Barring Patni Computers and Tata Motors, all Indian ADRs ended in the green today. MTNL and Rediff were the two main winners, each gaining more than 4%.

Crude registers highest increase in price since January of this year

Crude prices soared by more than $4/barrl today after crude inventories dropped for the fourth straight week. Crude-oil futures for light sweet crude for January delivery closed at $94.39/barrel (higher by $4.37/barrel or 4.9%) on the New York Mercantile Exchange. It was the highest increase in price since January of this year.

As per the weekly inventory report disclosed by the EIA, U.S. crude inventories dropped for a fourth week in the week ending 7 December, down 700,000 barrels. At 304.5 million barrels, U.S. crude inventories were at their lowest since March, 2005, but are still in the upper half of the average range for this time of year. U.S. refineries operated at 88.8% of their operable capacity last week, down from the previous week's 89.4%.

On the New York Stock Exchange, 1.7 billion shares were exchanged, while nearly 2.3 billion shares traded on the Nasdaq. Advancing stocks outran those declining on both exchanges, by 9 to 7 on the NYSE and 15 to 14 on the Nasdaq.

Tomorrow, investors will focus on economic reports to set the tone of trading. Labor Departments Producer Price Index report is expected in the morning hours. Also garnering attention will be November retail sales results along with weekly jobless claims. Those reports will be followed by Business Inventories for October.

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