US stocks finished mixed and almost near the unchanged mark on Tuesday, 31 August 2010. Stocks traded with modest gains in the first half due to an upbeat consumer confidence report but then stocks slipped. But concerns about economic recovery took stocks lower in the second half of trading. Minutes from the last meeting of the Federal Reserve did little to dispel those concerns ahead of the release of employment numbers for August this week.
For the day, that ended on Tuesday, 31 August 2010, Dow ended higher by 4.99 points at 10,014.72. Nasdaq ended lower by 5.94 points at 2,114.03. S&P 500 ended higher by 0.41 points at 1,049.33.
Stocks still posted steep losses for the month as investors lowered their expectations for economic growth in response to a flood of weak data in August. The Dow shed 4.3% this month, its first down August in five years.
Six out of ten economic sectors ended higher led by financial, telecom, utilities and materials sectors on Tuesday. Technology, industrial, and healthcare sectors featured among the laggards. Dow components ended mixed. Tech heavyweights like Cisco Systems and Intel led the pack of laggards. On the other hand, JP organ Chase helped Dow lift up.
Stocks extended their bounce off the morning low amid news that the Conference Boards Consumer Confidence Index increased more than expected to 53.5 from 51.0. That overshadowed a disappointing Chicago PMI, which came in at 56.7 for August.
The Conference Boards present-situation index fell to 24.9 in August from 26.4 in July. Those saying present business conditions are good fell to 8.7% in August from 8.8% in July, while those saying jobs are hard to get rose to 45.7% from 45.1%. The expectations index rose to 72.5 in August from 67.5 in July. Those expecting better business conditions in six months rose to 17% from 15.8%, while those expecting more jobs rose to 14.6% from 14.2%.
Financials were up nicely today. The sectors gain made it one of todays best performers. Bank stocks were a boon to the sector. In addition, telecom stocks, were also strong performers.
Conversely, tech stocks have lagged for the entire session. The sectors loss comes as large-cap tech issues lose luster. Their weakness has also hampered the Nasdaq, which has trailed the Dow and S&P 500 for a modest margin all session.
Corporate headlines were relatively limited. Among the more notable announcements, Monsanto issued a tepid revenue forecast, while Exelon announced it will acquire the renewable energy unit of Deere & Co. in a deal valued at some $900 million.
In the latest minutes of the FOMC meeting, it showed that that the pace of the economic recovery slowed in recent months. However, many policymakers judged that downside risks to the U.S. recovery had become somewhat larger.
Crude prices ended substantially lower on Tuesday, 31 August 2010 at Nymex. Prices fell as concerns about economic recovery continued to surface. Prices also fell in anticipation that tomorrows inventory report will show increase in crude stockpiles for last week. On Tuesday, crude oil futures for light sweet crude for October delivery closed at $71.92/barrel (lower by $2.78 or 3.7%). For the month of August, crude ended lower by 8.9%. Oil witnessed its first monthly decline since May. The month started well, with prices surpassing $82 a barrel, but soon got derailed as key reports showed the bad times were far from over.
Precious metals ended higher on Tuesday, 31 August 2010 at Comex. Concerns about economic recovery increased the appeal of precious metals as an alternate investment. Prices registered substantial gains for the month of August. On Tuesday, gold for December delivery ended at $1,250.3 an ounce, higher by $11.9 (0.9%) on the New York Mercantile Exchange. It was highest close for gold in two months.
Gold ended the month of August 2010 higher by 5.6% after ending July lower by 5%. It was the worst monthly loss for gold since December 2009. On Tuesday, September Comex silver futures ended higher by 36 cents (1.9%) to $19.43. It was highest close for silver in three months. For the month of August, silver ended higher by 8%.
Indian ADRs ended mixed on Tuesday. Tata motors rose 1.1% while Patni Computers dropped 1.9%.
Tomorrow, the economic report expected is the ADP employment data and the weekly inventory report on crude stockpiles. Other than that, earning reports will continue to trickle in.
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