wall st investors looking for bargains after plung
(IE) Wall St investors looking for bargains after plunge RWE News 9:19:020 20/05/2006 Sydney - Saturday - May 20: (RWE Aust Business News) Wall Street investors are starting to look for bargains after the worst two-week drop since 2003. Equities made a welcome return to the black but the session proved a shocker for commodities which posted their biggest weekly loss in 25 years. The Dow picked up 16 points in the latest session but still lost 236 on the week. It has declined 2.1 percent since May 12, its worst weekly performance since January. On May 17, it dropped more than 214 points. The S&P 500 lost 1.9 percent and the Nasdaq retreated 2.2 percent. The S&P 500 is down 4.4 percent over the past two weeks in the wake of the Fed's May 10 decision to lift its benchmark lending rate 25 basis points to 5 per cent for a 16th straight time in an attempt to fight inflation. The retreat was the worst since January 2003. The Nasdaq composite broke its eight day losing streak, the longest since September 1994, adding 14 points sessions, but still ended the week 49 behind. The 100 index also retrieved 14 points but finished down 35 overall. Financial markets believe the US economy will still improve despite rising interest rates The commodities losses covered copper, gold and silver as alternative investments. The gold price plunged $22.90 to $656.70 oz on the COMEX spot month while the June future dropped $23.40 to $657.50 oz. What other good news that emerged was the fall in crude oil to a six-week low after Iran signalled it may allow greater access to United Nations atomic agency inspectors. It lifted worries that Iran might use its oil exports to confront the UN against sanctions. The June crude contract 92 cents, or 1.3 percent, to $68.53 a barrel on the New York Mercantile Exchange, the lowest close since April 7. Prices dropped 4.9 percent this week, the biggest weekly decline since March. The futures record price was $75.35 barrel set on April 21. Some analysts are now speculating whether the commodity boom is over. Treasuries dealers suggested that the commodities slump helped support the bond market as investors switched horses midstream. The Fed's Hoenig said the central bank has to be mindful against "overshooting" on rate increases. The 10 year cash paper yield slipped 1 point to 5.06 per cent while the 30 year bond yield came off 3 points to 5.14 per cent in contrast to the 2 year note yield which gained 3 point to 4.96 per cent.
While recent inflation readings have been higher than anticipated, analysts expect inflation and economic growth to moderate. In the metals sector copper ended afternoon kerb trading at the London Metal Exchange down 7.3 per cent to $7,550 per tonne as investors, spooked by fear of rising inflation, pulled some money out of risky assets including commodities. Financial markets see the latest sell-off in commodities is part of an overall flight from risk in the financial markets as the spectre of higher inflation raised its head, but it did not mean buying was over for good. A stronger US dollar and the commodities slide, pushed the $A 34 points lower at US75.91 in New York overnight.
Key New York indices end higher -------------------------------
Wall Street's Dow Jones Industrial Average edged up 15.77 to 11,144.06. Dow range for the session was a high of 11,180.29 and a low of 11,075.22. The Dow components were rises 18 and falls 12.
Standard and Poors 500 index firmed 5.22 to 1267.03. The Nasdaq Composite index rose 13.56 to 2193.88 and the Nasdaq 100 index rose 13.75 to 1600.86 Business was 3 billion trades on the NYSE, swelled by volatility and commodities movements. The NASDAQ posted 2.5 billion sales. Dow rises included Alcoa 67c or 2.14pc to 31.98, Boeing 1.88 or 2.27pc to 84.61, General Motors 62c or 2.58pc to 24.68, Verizon Communications 49c or 1.61pc to 30.90 and AT&T 54c or 2.14pc to 25.28. Among the Dow losers were Caterpillar 1.84 or 2.47pc to 72.78, Hewlett Packard 46c or 1.42pc to 32.02, Intel Corp 29c or 1.55pc to 18.36 and Merck 71c or 2.02pc to 34.42. US stocks ended the day slightly higher, with the technology sector improving after Dell reported a restructuring that includes using chips made by Advanced Micro Devices in its personal computers. Intel shares fell 29c or 1.55pc to 18.36 after Dell said it would begin using chips from Intel rival AMD in some of its high-end servers. Shares of AMD shot up 11.5% to 34.95. The announcement represents a major switch for Dell, which had used microprocessors from Intel exclusively. Dell shares rose 62c or 2.6pc to 24.57. Gap shares rose 56c or 3.1 pc to 18.48 after the apparel retailer's first-quarter net income fell 17% because of slumping clothing sales at all its store brands, with the company adding that an upturn is unlikely until the second half of the year.But Gap's profit managed to exceed Wall Street estimates, although sales of $3.44 billion fell just shy of estimates. Mittal Steel's American depositary shares fell 1.06, or 3.1%, to 33.10 after it raised its offer for rival Arcelor by 34%, only one day after formally launching a bid for the world's second-biggest steelmaker. British Airways surge in fourth-quarter profit helped trigger a broad advance in the airline sector early Friday. Shares of British Airways jumped 9.3pc to 66.16 in New York. Nordstrom's shares fell 22c to 35.28 a day after the Seattle-based department-store retailer said its earnings surged 26% amid tighter spending and better sales Genentech Inc. rose 4.10 to 80.03. The world's second- biggest biotechnology company was upgraded to overweight from equal-weight by Morgan Stanley. AnnTaylor Stores Corp. added $1.10 to $38.40. The women's clothing retailer posted fiscal first-quarter profit of 53 cents a share. Analysts projected 40 cents, on average. The company raised its yearly profit forecast by 10 cents a share to as much as $1.75. ENDS !END
