Stocks manages to stabilize towards the day’s end
March 5, 2008
On the 4th of March the Wall Street finally managed to cut the losses as the day came to a close after a tough session of trading. The day however saw the Blue Chips taking a fall. The broader section of the market however was able to neutralize the losses it had incurred in the tough session which was influenced by the questions regarding profit forecasts of Intel and the Citigroup. The grim comments about the state of the economy which came from various Fed officials were also influential on yesterday’s trading.
The Dow Jones industrial average dropped by almost 0.4 percent and the Standard and Poor’s 500 lost 0.3 percent. The NASDAQ composite index which is heavy on the tech industries however remained almost unchanged. All these three main indexes had fallen a lot more during the after noon session. The DOW had actually lost 1 point to be down by 200 points. But the stocks were able to decrease the margin of losses as the day came to an end. The main reason which contributed to the stocks gaining some respect towards the end was because of the reports that the Ambac Financial was close to a bailout package. The encouraging comments which came from the CEO of Cisco also greatly helped the stocks to cut down on its losses.
The 5th of March is scheduled to bring out a lot of economic data and this would play its share of role in determining the value of shares. The main report for which the investors are eagerly waiting is the employment report for the month of February. This report would be coming out on the 7th of March. Reports about the manufacturing sector as well as the service sector are also scheduled to come out this week. Another piece of economic data which the investors are waiting for is the intervallic beige book evaluation of the nation’s economy. This is planned to come out by the evening of the fifth of March.
The reason for the early loses the stocks took was because of the 4.3 percent slump the Citigroup took to reach the lowest level in the last nine years. The full year earnings of the company were cut by Merrill Lynch. Merrill reported that the Bank was still, in a position to take another $18 billion in the form of write downs linked to mortgage bets which went bad. In separate news the Dubai International CEO said that the Citigroup might need extra funds to cover for its losses.
The Intel Company also reported that there might be a decrease in its profits. This warning along with the news from Citigroup was bad news enough for the market to go down. But the news which came out later in the evening about the growing possibilities of a bailout for the bond insurer Ambac together with some upbeat remarks from the CEO of the Cisco Company ensured that the stocks were able to gain some amount of respect and cut the losses by some extent.