FX.co ★ The US market review for 15/10/2010

On Friday, the US stock indices closed in different directions.
The DJIA fell by 31.79 points, 0.29%, to 11062.78. Over a week the index grew by 0.51% - this is the sixth week out of last seven, at the end of which the DJIA rose. The Nasdaq Composite edged up by 33.39 points, or by 1.37%, to 2468.77 points on Friday, and by 2.8% this week. The Standard & Poor’s 500 increased by 2.38 points to 1176.19 on Friday, and added 0.95% for the week.
The shares of General Electric shed 5%, as the reading of company’s income for the third quarter turned out to be worse than expected. The investors were actively selling the stocks of financial companies and banks. Bank of America securities lost 4.9%, as the S&P Equity Research declined the recommendation to “hold” from “strong buy”, having noted that the bank may be less prepared for the probable losses connected with mortgage-repurchase demands. The quotes of J.P. Morgan fell by 4.1%.
The dynamics of shares quotes of technology companies was the best on Friday. Hewlett-Packard shares gained by 1.6%, Cisco Systems added 1.3% and Microsoft advanced by 1.2%.
The interest in the shares of the technology sector was promoted by the report of Google, published on Thursday. The company announced its profit for the third quarter ticked up by 32%. Google stocks jumped by 11%. The comments of the FRS Chairman Ben Bernanke strengthened the investors’ confidence that the FRS is ready for new priming measures, though there is a question if these expectations have been already taken into account in the quotations.
In the recent survey of the Wall Street Journal, the economists were nearly unanimous in forecasting that the FOMC would announce additional assets purchase at its November meeting. However, the assessment of benefits and risks differs strongly. Ben Bernanke pointed out that the inflation rate remained below the target level of 2%, and the economic growth is slowly in order to decline the unemployment. In September, the seasonally adjusted CPI rose by 0.1% compared to August. The core inflation was unchanged.
Other data, released on Friday, show the complex situation. The data on the retail sales and manufacturing activity in New York showed the advance. On the other hand, the Michigan consumer sentiment index fell. In August, the inventories of the US companies grew stronger than it was expected, whereas the sales were growing slower, thus indicating the stable but weak economic recovery.