US stocks pared all of their intra day gains and ended lower on Thursday, 26 January, 2012. Mixed economic data, mixed earning reports and lack of any proper leadership weighed on stocks from the very start. The dollar stayed weak and commodities had a modestly strong day. The broad market was up with a modest gain for only a short while before it began to falter. Its slip invited a gradually selling effort that took stocks to session lows in the final hour.
For the day, that ended on 26 January, 2012, Dow ended lower by 22.33 points or 0.18% to end at 12,734.63. The Nasdaq shed 13.03 points or 0.5% to end at 2,805.3. The S&P 500 lost 7.6 points or 0.6% to end at 1,318.45. Dow was trading higher by 84 points during intra day trading.
Nine out of ten economic sectors ended lower led by telecom, energy, financial and technology sectors. Utilities was the sole advancing sector.
Twenty four out of thirty Dow components ended lower led by AT&T. Caterpillar led the group of only six Dow winners.
Among economic reports expected for the day, the Commerce Department said U.S. sales of new homes fell 2.2% in December to a seasonally adjusted annual rate of 307,000. For all of 2011, sales of new homes fell 6.2% to 302,000, the worst on record. And first-time jobless claims rose by 21,000 to 377,000 in the week ended 21 January 2012, slightly above expectations, but the four-week average, considered a better gauge of labor-market trends, fell slightly to 377,500.
But bolstering sentiment, data from the Commerce Department had orders for U.S. durable goods rising 3% in December.
Investors had warmly greeted a round of better-than-expected earnings from companies including Caterpillar. The heavy-equipment maker gained after topping estimates last quarter. AT&T fell the most among the Dow 30, with the telecom reporting a $6.7 billion quarterly loss related to its failed merger with T-Mobile USA.
Among other companies that were supposed to report earnings, 3M bested expectations for the bottom line. Among other widely held names, Netflix posted an upside earnings surprise, but both Noble and Bristol-Myers Squibb disappointed. Colgate-Palmolive announced in-line earnings.
There were no major, fresh developments coming out of the European Union debt crisis on Thursday, as the Feds FOMC meeting results have temporarily overshadowed the EU debt crisis. This week there has been waning optimism that Greek officials and the private sector can agree on a viable plan for their debt restructuring. The market place will continue to closely to monitor the day-to-day machinations coming out of the EU, regarding their sovereign debt and financial crisis.
In the currency market on Thursday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies fell by almost 0.2%.
Decliners edged just past advancers on the New York Stock Exchange, where 866.5 million shares traded hands.
Precious metal prices ended higher on Thursday, 26 January 2012 at Comex. Comex February gold futures prices ended the U.S. day session solidly higher on Thursday, after hitting a fresh seven-week high. The precious metals markets continued to feel the bullish effects of Wednesdays FOMC statement. Lower US dollar and firmer crude oil prices also affected prices. Gold for February delivery ended higher by $26.6 or 1.6%, to end at $1,726.7 an ounce on the Comex division of the New York Mercantile Exchange on Thursday. Prices rose to a high of $1,731.5 during intra day trading. On Thursday, silver prices for March delivery rose $62 or 1.9% to end at $33.74.
Crude prices firmed up on Thursday, 26 January 2012 at Nymex. Prices extended previous sessions rally on the Federal Reserves decision to keep interest rates low for the next three years and some positive U.S. economic data earlier Thursday. Light and sweet crude for March delivery rose $0.30 (0.3%) to $99.7 a barrel on the New York Mercantile Exchange on Thursday. It rose to a high of $101.39 during intra day trading.
The metals markets continued to feel the bullish effects of Wednesdays FOMC statement from the U.S. Federal Reserve that suggested the Fed will continue its very accommodative monetary policy for quite some time to come, at least through 2014. Federal Reserve Chairman Ben Bernanke said late on Wednesday the U.S. central bank was ready to offer the economy additional stimulus after it announced it would likely keep interest rates near zero until at least late 2014.
Indian ADRs ended mixed on Thursday. In the IT space, Infosys was up 1.1% at $54.83 and Wipro was down 0.4% at $10.99. In the Banking space, ICICI Bank was down 1% at $35.25 and HDFC Bank was down 1.4% at $31.3. In the Telecom space, MTNL was up 1.7% at $1.21 while Tata Communication was down 0.3% at $9.56.
For tomorrow, the advance GDP reading for last quarter is the only economic report expected for the day. Earning reports will continue to pour in also.
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