Friday, January 01, 2010
Market Commentary - Jan 1
Dow Industrial Average
Key Statistics: Dec 31
Open: 10548.51
High: 10551.01
Low: 10435.45
Close: 10436.44
Change: -120.46 (1.15%)
RSI: 52.60
MACD: 67.91
Snapshot:
· After three successive sessions of flat and listless trading, bears dominated the Thursday’s proceeding. Dow ended the last day of 2009 with losses of 120.46 points, or nearly 1.15%, to close the year at 10436.45 points, near the day’s low. The movement on NASDAQ Composite also ended with losses of 22.13 points, or 0.96%, to close the year at 2271.34 points. The broad based S&P 500 shed 11.32 points, to settle at 1116.03 points, with losses of 1% in the session.
· The initial jobless claims for the week lowered down to 4,32,000 by 22,000. The layoff was much lower than anticipated by analysts, and is slowly petering out. The initial jobless claims was at a 16 months low. Even the continuing jobless claims came at a lower number of 4,98,000.
· During the Thursday’s session, as many as 29 stocks from Dow participants shed some gains, while JP Morgan Chase was the sole Dow participant to have moved up marginally.
· All the ten sectors from Dow participants closed with losses, with utilities recording losses of 1.5%, industrials and materials paring 1.3% each and healthcare sector also shedding 1.2% in the session.
· US Dollar Index moved up nominally to a level above 78.5 yet again after recording gains against Japanese yen and Euro.
· Crude oil remained higher around $79.26 per barrel, following the crude inventory weekly report and cold weather conditions.
· Gold moved up marginally on Thursday, to $1095.2 per ounce level.
Strategy
Traders and investors should remain cautious at this stage, as markets are taking lot of efforts to mop up further gains. Gains are shrinking session by session and chances are high that markets may slip in near future. Traders should exit for entry at lower levels.
Market Commentary
After three continuous days flat trading with listless volumes in the last week of the year, stocks lost considerable grounds on Thursday in the last session of year, as Dow shrugged 120 points on fears of interest rate hike at an early stage.
The initial jobless claims for the week failed to check the last hour sell-off in the equities, despite the fact that the same was pegged at a lower number of 4,32,000 claims, which was the lowest in the past 16 months. The continuing claims also slipped to 4.98 million, which has also come below 5 million after a long gap.
The Dollar Index also gained marginally in the session after the US $ remained strong against Euro and Japanese Yen. The Dow index has already soared by 18.8% in 2009, while Nasdaq Composite has turned out be an outperformer, by gaining close to 44% in the same year.
The volumes for trading continued to light on Thursday also, as many participants were off for holidays.
Crude oil edged up marginally on Thursday and ended up the session at $79.26.
Gold also gained marginally on Thursday for February delivery, and ended the day over $1095 per ounce.
All the10 sectors forming part of the Dow components ended the day in negative.
Even the individual stocks forming part of the Dow could not perform too well, and as many as 29 stocks out of 30 stocks ended the last day of year with some losses. JP Morgan Chase was the only exception, and gained 0.34% in the session.
Amongst the losers, Hewlett Packard with 2.68%, Caterpillar Inc with 1.83%, 3M with 1.48%, Boeing with 1.51% ended the session with high losses.
The Day Ahead
Construction spending for November would be released on Monday.
ISM Manufacturing Index for December to be released on Monday.
