US stocks slump despite President signing stimulus deal

Ongoing economic concerns hammer US stocks

Stocks at Wall Street ended almost at their session lows on Tuesday, 17 February, 2009. Market started the day deep in the red on Tuesday. Despite President Barak Obama signing the stimulus package to jumpstart the economy, indices showed no signs of improvement. Bogged down by the financial sector, stocks lingered in the red despite a somewhat encouraging report from the housing sector. Market even ignored quite a few good earning reports.

The Dow Jones Industrial Average ended lower by 297 points at 7,552, the Nasdaq closed lower by 64 points at 1,470 and the S&P 500 closed lower by 38 points at 789.

All ten sectors ended in the red today led by consumer staples and financial sectors. Twenty-eight out of thirty stocks ended in the red today. Wal-Mart was one of the two winners.

Wal-Mart today reported better-than-expected earnings this morning. However, profits were down from the prior year. Still, Wal-Mart posted top line growth. The company also issued an in-line earnings outlook for the year.

The financial sector acted as the laggard in the market today. Investors seem to remain largely unimpressed by the $789.5 billion economic stimulus bill, which was signed by the President today. The bill aims to spur long-term growth instead of giving the economy a sudden short term push.

Yesterday, a better than expected housing report had hit the wires. But it had no positive impact on the market. The National Association of Home Builders reported yesterday that the home builders' sentiment index improved for the first time since September, rising one point to 9 from a historic low of 8 in January. The builders said the index was "virtually unchanged" in February. At a level of 9, the housing market index shows that fewer than one in 10 builders thinks business is good. The index was at 20 a year ago, and peaked at 72 in the summer of 2005, 44 months ago. Readings over 50 indicate that more builders think business is good than think it's bad.

Bank stocks garnered maximum attention today as Citigroup, Bank of America and JP Morgan Chase witnessed huge volumes. Reports indicated that regulators may begin stress-testing banks this week. The move comes as part of Treasury Secretary Geithner's plan to help restore the health of banks, and would aim to mesh private and public funds.

Wal-Mart was the only Dow component to trade with a gain today. The company reported better-than-expected earnings this morning. However, profits were down from the prior year. Still, Wal-Mart posted top line growth. The company also issued an in-line earnings outlook for the year.

A strong dollar led to mixed commodity prices today. While gold glittered, oil glided down.

On Tuesday, crude-oil futures for light sweet crude for March delivery closed at $34.93/barrel (lower by $2.53 or 7%) on the New York Mercantile Exchange. During the day, it fell to a low of $34.45. Last week, crude ended lower by 6.6%.

Other than a few earning reports, there are a few economic data scheduled for tomorrow. Wednesday's economic calendar features the January housing starts and building permits data, as well as import and export prices data before market opens. January industrial production and capacity utilization are also both due tomorrow. In the afternoon, the minutes from the 28 January FOMC meeting will hit the wires.