US stock market morning report – December 15, 2011

U.S. once again ended higher for first time in four days on Thursday, 15 December 2011. Better than expected economic data on most fronts helped stocks rise. But stocks pared some of their intra day gains after the head of the International Monetary Fund stoked fears that Europe’s sovereign-debt crisis is worsening. The dollar stayed flat for the day.

For the day that ended on Thursday, the Dow Jones Industrial Average rose 45.33 points, or 0.4%, to finish at 11,861.81 on Thursday. The Nasdaq Composite rose 1.7 points, or 0.07%, to 2,541.01. The S&P 500 Index rose 3.91 points, or 0.32%, to 1,215.75.

Seven out of ten economic sectors ended higher led by utilities, healthcare and consumer staples sectors. Energy and technology sectors ended lower while financial sector remained unchanged.

Financials had been the biggest beneficiaries of the early bounce. By session’s end all of that was pared and the sector finished flat. Technology-related stocks lagged almost all session, causing the tech-rich Nasdaq to trail its counterparts.

In the currency market on Thursday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies stayed flat for most part of the day and ended lower by about 0.3%. The dollar rose to 11 month high mainly against the euro a day earlier.

There were no major, fresh developments on the European Union debt crisis scene on Thursday. A Spanish bond auction was well received on Thursday, and that was a bit of a calming effect on the market place. The Euro currency has fallen to a fresh 11-month low this week amid the EU debt crisis.

US stocks rose on Thursday after the major initial claims data for the week showed a seasonally adjusted 366,000 workers filed initial jobless claims in the week ended 10 December 2011, well below forecasts and the lowest since May 2008. The figures were the latest indication that the weak jobs market is slowly building strength. The four-week moving average of new jobless claims fell to the lowest level since July 2008.

A slew of other U.S. economic data greeted investors. U.S. wholesale prices rose slightly in November due to higher food costs, but the underlying rate of increase in producer prices remained tame, indicating little inflation pressure, while the U.S. current account deficit narrowed in the third quarter.

U.S. industrial production fell for the first time in seven months during November, an unexpected drop caused by declining output of cars, electronics, clothing, and other products.

The Empire State Manufacturing Survey improved to 9.5 for December. Many had expected a reading of just 3 for the Survey. The Philadelphia Fed Survey scored a reading of 10.3 in December, surpassing expectations for something closer to 4.5.

But stocks lost some steam after IMF managing director Christine Lagarde said that the sovereign-debt crisis requires action by countries outside of the European Union and called the global economic outlook “quite gloomy.” The comments put some of the focus back on Europe’s sovereign-debt crisis.

Among major stocks in the news, FedEx climbed 8% after the package-delivery service reported fiscal second-quarter earnings that exceeded expectations and affirmed its full-year outlook.

IBM lost 0.7% after the company agreed to acquire Emptoris, as the tech giant continues to place an emphasis on Web-based software-company purchases.

Crude prices ended modestly lower on Thursday, 15 December 2011 at Nymex. Prices fell despite a flat dollar and better than expected economic reports. Prices continued with their prior session’s decline when crude prices had slumped more than $5 at one single session. Light and sweet crude for January delivery fell $1.08 (1.1%) to $93.87 a barrel on the New York Mercantile Exchange on Thursday.

Precious metals ended mixed on Thursday, 15 December 2011 at Comex. Comex February gold futures prices turned lower for third straight day while silver rose. Comex February gold futures prices ended the U.S. day session lower on follow-through selling pressure from Wednesday’s sharp losses that did rattle traders and investors. March silver futures prices closed nearer the session high on Thursday but did hit a fresh 2.5-month low early on. Silver prices have been trending lower in a choppy fashion for six weeks.

Gold for February delivery ended lower by $9.7 or 0.6%, to end at $1,577.2 an ounce on the Comex division of the New York Mercantile Exchange on Thursday. On Thursday, silver prices for March delivery rose $0.34 or 1.2% to end at $29.27.

Indian ADRs ended mostly higher on Thursday. In the IT space, Infosys was up 0.5% at $50.09. In the Banking space, HDFC Bank was up 0.5% at $26.43 and ICICI Bank was up 0.4% at $25.63. In the telecom space, MTNL was up 2.2% at $0.92 and Tata Communication was up 4.2% at $7.7. Among others, Tata Motors was up 0.7% at $16.14 and Dr Reddys was up 1.5% at $29.85.

For tomorrow, consumer price index and core CPI are the only economic reports expected. Other than that, couple of earning reports will continue to trickle in.