US Market closes mixed

Market loses steam in final hour of trading and Dow closes lower for the day

 

The major indices closed mixed on Wednesday, 17 October, 2007 as investors cheered better than expected earnings reports from several Dow components along with Yahoo. Market remained in the positive zone for most part of the day. But higher oil prices and more disappointing news on the housing front led Dow close lower for the day. Five out of ten economic sectors posted gains today.

 

The Dow Jones industrial Average closed lower by 20.4 points at 13,892.54. The Nasdaq Composite Index, finished higher by 28.76 points at 2,792.67. S&P 500 finished higher by 2.71 points at 1,541.24. Thirteen out of thirty Dow stocks ended in red.

 

Technology stocks provided leadership today, in part due to Yahoo! and Intel.

 

Intel's third quarter earnings topped both the top and bottom line expectations and the company issued upside fourth quarter earnings guidance. Yahoo! reported third quarter earnings and the same beat market expectations.

 

Altria, CoCo-Cola and JP Morgan were the other Dow components who came up with better than expected earnings. But United Technologies was a big drag on the Dow. Though the company beat consensus third quarter estimates, the indication that it expects 2008 to be a challenging year took a toll on the stock.

 

Housing sector continues to bother market

 

On the economic news front, the housing sector remained a cause for concern. Housing Starts dropped 10.3% in September to a very low 1.191 million annual rate from 1.327 million the month before. Permits fell to a 1.226 million annual rate from 1.326 in August.

 

The September core CPI was reported up 0.2%. That was in line with expectations. It is the fourth straight 0.2% increase, and left the year-over-year rate at 2.1%. Market took the report positively.

 

Crude oil futures ended lower today after touching $89/barrel earlier in the day. Prices fell after Energy Department released the weekly inventory report which showed build up in crude inventories for the week ended 12 October. The build up was more than market expectations.

 

Crude oil futures for light sweet crude for November delivery closed at $87.40/barrel (lower by $0.20/barrel or 0.2%) on the New York Mercantile Exchange. Futures reached $89 during intra day trading.

 

Volume on the New York Stock Exchange topped 1.4 billion, and advancing stocks topped declining issues 16 to 15. On the Nasdaq, nearly 2.4 billion shares traded hands, and advancing stocks ran just ahead decliners.

 

For tomorrow, investors will look for corporate financials and economic data to help set the tone of trading for the day. On the economic news front, Initial Claims will be released followed by the Philadelphia Fed's report on regional manufacturing activity. On the earnings front, Pfizer, Banc of America and Google are the main names along with a lot of other companies.