Mar 1, 2009

Losses continue at Wall Street

27 Feb 2009 | 09:51 Losses continue at Wall Street

Stocks at Wall Street ended with losses once again on Thursday, 26 February. Though the financial and technology sectors gave a strong start to the day, stocks ended the day on a choppy note as more negative headlines continued to hit the wires. Market started the day on a strong note but with time gains just decelerated. Stocks actually began the session in positive territory as investors reacted positively to the strength in the financial sector.

The Dow Jones Industrial Average ended lower by 88 points at 7,182, the Nasdaq closed lower by 34 points at 1,391 and the S&P 500 closed lower by 12 points at 752.

Eight of the ten sectors ended in the red today. Energy and telecom sectors were the sole gainers.

Stocks started losing steam today after FDIC reported that at the end of the fourth quarter its list of troubled institutions grew to 252 from 171 at the end of the third quarter. Though market was expecting this, nevertheless, stocks got a new chance to slid.

IBM lent strong support today after the company reaffirmed its guidance for 2009 in a regulatory filing. IBM also indicated it has been investing to capture growth in emerging markets, while focusing on productivity and cost savings.

Among major economic reports scheduled for the day, the Labor Department reported today that first-time applications for state unemployment benefits for the week ended 21 February rose 36,000 to a seasonally adjusted 667,000.The level of initial claims thus stands at the highest since October 1982, up 86% from the same period in the prior year. The four-week average of new claims, which measures the underlying trend, rose 19,000 to 639,000, also the highest level since October 1982.

In a separate report, the Commerce Department reported on Thursday, 26 February, 2009, that sales of new homes in US fell 10.2% in January to a record-low seasonally adjusted annual rate of 309,000. The drop was despite a record drop in prices. Sales were down 48.2% compared with a year earlier.

Among other developments in the market, President Obama's proposed budget shows a $1.75 trillion deficit for this fiscal year. Obama is also setting a $250 billion placeholder for use if the financial system needs further assistance. That money would come on top of funds already allocated to stemming the financial crisis.

Oil prices shot up once again on Thursday, 26 February, 2009. Prices continued to rise after energy department reported yesterday in its weekly inventory report that gasoline inventories dropped during last week. Prices also rose after OPEC spoke about another production cut in coming months earlier during the week.

On Thursday, crude-oil futures for light sweet crude for April delivery closed at $45.22/barrel (higher by $2.72 or 6.4%) on the New York Mercantile Exchange. Last week, crude ended higher by 3.8%.

On Tuesday night, President Barack Obama delivered an optimistic speech before a joint session of Congress, saying that the U.S. will emerge from the recession stronger than before. In a lengthy speech, Obama rolled out more of his economic agenda, promising job creation, a doubling of renewable-energy production, health-care reform and a bolstering of education.

Tomorrow there are quite a few earnings and economic reports scheduled. The Chicago Purchasing Managers Index and University of Michigan's Revised Consumer Sentiment Survey are first on tomorrow's economic calendar. However, the fourth quarter preliminary GDP report will garner the most attention tomorrow.