US markets fall

Dow inches up in the green for a very brief time before ending the day in the red

Stocks at Wall Street ended with losses on Wednesday, 17 December. US market is still perhaps trying to come in terms with different moves announced by the Federal Reserve in present times to help the US economy overcome the recession it has already sunk in. After rallying yesterday as an instant reaction to Federal Reserve's more than expected rate cut, the US stock market was back in the red on Wednesday, 17 December, 2008. Dollar was severely under pressure today taking commodities like gold higher.

On Wall Street, the Dow Jones industrial average ended down by 100 points at 8,824.14, the Nasdaq closed down by 10.5 points at 1,579.3 and the S&P 500 closed down by 8.7 points at 904. Dow had climbed up in the green in between but soon had slipped back in the red.

Twenty-five out of thirty stocks ended in the red today led by Citigroup. Seven of the ten sectors ended in the red.

The financial sector was badly hammered today after Morgan Stanley posted a larger-than-expected loss for the latest quarter after Goldman Sachs posted first massive losses in a long period yesterday.

Among major earning reports hitting the wires today, consumer staples companies General Mills and ConAgra posted better-than-expected results for the latest quarter. General Mills actually increased its earnings per share outlook for fiscal 2009, but it is still short of the consensus forecast. ConAgra, on the other hand, issued an earnings outlook that exceeded the consensus estimate.

The Federal Reserve surprised market yesterday to save the U.S. economy slashing interest rates to just above zero and promising to try an array of new economic measures to stimulate spending. The central bank's Federal Open Market Committee established a target range for the federal funds rate of zero to 0.25%, effectively cutting its key rate for overnight lending to banks by between 0.75% and 1%.

The Fed gave clear signals that it has moved on to other measures beyond setting interest rates in its fight to keep the economy rolling.

Crude prices dropped substantially today, Wednesday, 17 December, 2008. Prices fell despite a weak dollar and also as OPEC announced another production cut. But prices fell as an impact of the weekly inventory report by the energy department.

On Wednesday, crude-oil futures for light sweet crude for January delivery closed at $40.06/barrel (lower by $3.54 or 2%) on the New York Mercantile Exchange. Earlier in the day, prices touched a low of $39.98. For this year in 2008, crude prices have dropped 51%.

After a meeting in Oran, Algeria, the Organization of the Petroleum Exporting Countries agreed to cut 4.2 million barrels a day from its actual September production level of 29.045 million barrels a day. The production cut is effective on 1 January, 2009. Excluding previously announced cuts, OPEC will actually cut its daily production by 2.2 million barrels from current levels. That constitutes its biggest production cut ever.

At the currency market on Wednesday, the dollar extended its losses after the Fed decision yesterday, adding more upward pressures on gold prices. The dollar index fell as much as 2.7% after dropping 2% yesterday.

Volume on the New York Stock Exchange topped 1.3 billion, with advancing stocks ahead of those declining 3 to 2. On the Nasdaq, more than 877 million shares exchanged hands, and decliners ran just ahead of advancers.

For tomorrow, the weekly initial jobless claim reading is expected to garner additional attention. That will be followed by the November leading indictors and December Philadelphia Fed reports