Big losses at Wall Street
Stocks at Wall Street ended with substantial losses on Thursday, 29 January, 2009. Even though the stimulus plan got passed at the House, Wall Street is perhaps still not happy about the overall economy. Dour economic reports, corporate layoffs and mixed earning reports weighed on US stocks today. Financials came to the forefront once again today and led the downturn in stocks today.
The Dow Jones Industrial Average ended lower by 226 points at 8,149, the Nasdaq closed lower by 50 points at 1,507 and the S&P 500 closed lower by 29 points at 845.
All 10 of the major economic sectors sported losses as the major indices drifted to fresh session lows. The financial sector led market down today. It did not get any support from energy sector either with crude prices trading lower.
To help stimulate the ailing economy, the U.S. House of Representatives has approved an $819 billion stimulus plan. But it brought no smile on Wall Street's face.
Among major economic reports for the day, there were quite a few of them. The durable goods order, initial jobless claims data and December new home sales data - all checked in below expectation.
Initial jobless claims for the week ended Jan. 24 increased modestly to 588,000, which is a bit above the consensus estimate of 575,000 claims. Continuing claims climbed to 4.78 million. That is the highest level of continuing claims dating back to four decades.
December durable goods orders declined 2.6%. That was the fifth straight monthly decline reflecting an ongoing pullback in business investment. The drop was more than expected. Excluding transportation, orders were down 3.6%.
Separately, December new home sales declined almost 15% from a downwardly revised November reading, which was worse than expected. The Commerce Department estimated sales of new homes fell to a record low in December, declining 14.7% to a seasonally adjusted annual rate of 331,000.
In the earning arena today, Dow component 3M met expectations. However, 3M lowered its 2009 earnings outlook. Colgate-Palmolive is helping limit selling pressure among consumer staples stocks after the company posted a positive earnings per share surprise.
Crude prices ended lower on Thursday, 29 January, 2009 as a set of weak economic data hinted towards lower energy demand in the coming months. Prices also went lower after yesterday's weekly inventory report showed build up in crude inventories for fifth straight week.
On Thursday, crude-oil futures for light sweet crude for March delivery closed at $43.6/barrel (lower by $0.72 or 1.7%) on the New York Mercantile Exchange. Last week, crude prices ended higher by 9%. Prices had reached a low of $40.18 earlier during the day today.
At the currency market on Thursday, the dollar index, which tracks the dollar against a trade-weighted basket of six major currencies, continued to rise. The dollar index rose 0.3% today.
The earning reports for tomorrow will feature quite a few big names like P&G, Honeywell and Exxon Mobil. Among economic reports, the advance fourth quarter GDP reading headlines will hit the wires ahead of the opening bell. The revised consumer sentiment survey from the University of Michigan is scheduled to follow together with the fourth quarter Employment Cost Index.
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