US stocks end higher
Stocks at Wall Street ended higher on Tuesday, 03 January, 2009. Couple of better than expected earning reports and a positive economic data pertaining to the housing industry gave a good boost to the stocks. Even though January car sales data checked in line with expectations, each company witnessing major drop, stocks ignored the data and Dow continued to climb upwards.
The Dow Jones Industrial Average ended higher by 141 points at 8,078, the Nasdaq closed higher by 22 points at 1,516 and the S&P 500 closed higher by 13 points at 838.
Nine of the ten sectors ended in the green today. Financials were the only laggard. GM was one of the few laggards among Dow components today.
The auto sales of January that checked in came in as usual. Ford announced January sales declined approximately 40% year-over-year, while General Motors reported a near 51% year-over-year drop in January sales. Toyota Motor reported that January sales decreased more than 34% from the prior year. Kia Motors was the only company that witnessed growth in January sales.
Among major economic reports for the day, The National Association of Realtors reported today that the number of new sales contracts on existing homes jumped a seasonally adjusted 6.3% in December. Lower mortgage rates and falling prices perhaps led to this jump. The pending home sales index rose 6.3% in December and is now up 2.1% compared with a year earlier.
The increase points to a healthy gain in existing-home sales in January and February. The index is based on signed sales contracts, which usually occur a month or two before the sale is closed, when sales are reported in the NAR's existing home sales report.
Merck and ADP came out with better than expected earning reports. On the other hand, UPS, Sandisk, Motorola and Dow Chemical failed to live up to expectation.
Among other major events in the US market today, Treasury released details announcing it invested approximately $1.15 billion in 42 banks as part of the Capital Purchase Program. The added capital is meant to help the banks meet lending needs and help keep credit flowing. On a similar note, reports indicated that Citigroup plans to use roughly $36.5 billion of the TARP funds it has received for new loans.
On Tuesday, crude-oil futures for light sweet crude for March delivery closed at $40.78/barrel (higher by $0.70 or 1.7%) on the New York Mercantile Exchange. Earlier during the day, it touched a high of $41.17. Last week, crude prices ended lower by 10%. In January, 2009, crude shed 14%.
At the currency market on Tuesday, the dollar index, which tracks the dollar against a trade-weighted basket of six major currencies, fell by 1%.
Wednesday's economic calendar features the January Jobs Report and the January ADP Employment report. The January ISM Service Index and the wekly energy inventory reports are also due tomorrow morning.
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