Comments from Countrywide's Chairman leave a nervous feeling among investors
Clear sense of nervousness ruled over US Market today, Thursday, 23 August, 2007 as the recession debate once again heated up and credit worries rekindled. Comments from the Chief Executive of USA's largest mortgage lender, Countrywide Financial, led to this nervousness.
The Dow Jones Industrial Average closed almost unchanged today at 13,235.88 marginally down by 0.25 points. Tech-heavy Nasdaq dropped 11.1 points to close at 2,541.7. S&P 500 lost 1.57 points to close at 1,462.5.
Sixteen out of thirty Dow stocks closed in the green today. IBM, H-P, AT&T and Mc Donalds were the main Dow winners. Boeing, Home Depot, General Motors and United Technologies were the Dow laggards.
Home-Depot led the team of the Dow laggards on reports that the company's $10.3 billion deal to sell Home Depot's wholesale supply division might fall apart.
Countrywide Financial, CEO, Angelo Mozilo telling a television channel that the housing slump will lead to a "recession" and that there is still a tremendous liquidity problem led indices reverse their course of direction.
Market welcomes Bank of America's equity stake in Countrywide
When market opened in the morning, the indices opened in the green. Indices rallied on news of Bank of America's $2 billion investment in Countrywide. The news initially helped ease the worst of fears about a possible credit crunch.
But soon after the nation's largest mortgage lender's CEO spoke about a significant decline in economic activity, it gave sellers an added excuse to take some money off the table.
Of the five sectors closing lower, Materials paced the way followed by Industrials and Financials. Technology sector closed in the green getting support from IBM and H-P. But Nasdaq closed in red as neither of them are listed on Nasdaq.
Among the Indian ADRs, all Indian ADRs ended in red today. ICICI Bank and HDFC Bank led the decliners. HDFC Bank dropped by 3.8% while ICICI Bank dropped by 2.3%. Rediff and Sify followed them dropping 1.7% and 2% respectively.
Crude rises snapping three sessions of fall
Crude oil future prices increased today. Drop in supplies of motor gasoline for week ended 17 August in yesterday's weekly inventory report was perhaps the main reason for this. Oil market also likely found some additional support today from news that some Mexican oil supplies will be delayed due to Hurricane Dean.
Crude-oil futures for light sweet crude for October delivery closed at $69.83/barrel (higher by $0.57/barrel or 0.82%) on the New York Mercantile Exchange. On a yearly basis, prices are 2.7% lower. .
Nearly 1.4 billion shares exchanged hands at the New York Stock Exchange, with advancing stocks running just ahead of decliners. At the Nasdaq, 1.6 billion shares were traded, with declining stocks outpacing advancers 9 to 5.
For tomorrow, investors will look for economic data to help set the tone of trading. July Durable Orders will be released at 8:30 ET and will be followed by July New Home Sales data at 10:00 ET
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