Sep 14, 2008

Economic jitters worry US Market

04 Sep 2008 | 09:26




Economic jitters worry US Market



In the US stock market on Wednesday, 03 September, stocks ended mixed
as economic jitters once again concerned investors even after a strong
manufacturing report from the Commerce Department. After lingering in
the red for the entire day, stocks tried to bounce back in the final
hour of trading. But Dow only managed to end in the green while Nasdaq
and S&P still ended in the red. Financials tried to give as much
support as they could. Six of the ten sectors ended in the red led by
the technology sector.

The Dow Jones industrial Average ended
the day with a gain of 15.96 points at 11,532.89. The Nasdaq Composite
Index, finished lower by 15.5 points at 2,333.73. S&P 500 finished
lower by 2.6 points at 1,274.98.

Eighteen out of thirty Dow stocks ended in the green today led by GM. Intel led the group of Dow decliners.


Among economic news of the day at Wall Street, The Commerce Department
reported that factory orders remained surprisingly strong, with the
fifth straight month of positive growth. July factory orders rose 1.3%.
Excluding transportation, orders rose 1%. In addition, unfilled orders
were up 0.7%, marking the 29th increase in the last 30 months, and
indicating that manufacturing sector will remain busy. Orders in June
were revised higher to 2.1% from 1.7%.

But elsewhere, The Fed's
Beige Book, a collection of anecdotal economic reports from the 12
Federal Reserve districts, showed an economic slowdown in most
districts. At the same time, most districts continued to report price
pressures due to the elevated costs of energy, food and other
commodities. Wage pricing pressures were moderate, as the sluggish
economic environment has allowed businesses to limit their salary
increases.

The August auto sales were reported today. Ford
reported a 27% year-over-year drop in August North American vehicle
sales, which was worse than the expected 21% decline. Consumer
preference continues to shift to smaller vehicles, resulting in 53%
decline in SUV sales and a 39% drop in truck sales. Toyota also
reported a drop in August North American sales, with a year-over-year
decline of 9.4%. The Lexus Division saw a sales decline of 9.1%.


But GM fronted the blue-chip gains today, with shares of the automaker
rising 5.8% after it reported a 20.3% decline in U.S. light vehicle
sales in August from the year-ago period.

In corporate news,
Corning issued a third quarter earnings warning due to
lower-than-expected LCD glass shipments. This led to a downslide in
technology sector today. Likewise, ConAgra issued downside earnings
guidance for its next quarter due to underperformance in its consumer
foods business.

Also, Coca-Cola is reported to be buying a Chinese juice company in a deal valued at roughly $2.4 billion.


At the crude market on Wednesday, crude-oil futures for October fell
for fifth straight day. It fell by $0.36 (0.3%) to $109.35 a barrel.
Commodities tumbled the most since March yesterday, 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 Wednesday, the euro fell to its lowest level since January
against the dollar, notching a low of $1.4384 against the greenback
earlier in the session. The British pound continued its rapid descent
against the dollar, testing levels unseen since April 2006. The dollar
index, gained 0.2% to 78.19. The greenback and gold tend to move in the
opposite direction.

Volume on the New York Stock Exchange topped
1.2 billion, with advancers outrunning decliners 8 to 7. On the Nasdaq,
876 million shares were exchanged, and advancers topped decliners 7 to
6.

For tomorrow, economic data will take center stage. The
August ADP employment report is due followed by the weekly initial
jobless claims and revised second quarter productivity data. The ISM
Services Index is scheduled for release later in the morning. Last on
the list are the weekly crude oil inventory figures from the Department
of Energy.



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