Another trading day with the Dow Jones Industrial Average in the red as it lost 27 points or -0.31% as poor sales data and a shock from Wal-Mart (WMT: 51.38, -4.16 (-7.49%)) hit the index hard. The Nasdaq composite index was up 1.12% ending the day at 1617 points. The S&P 500 index also ended the day up 38 basis points. The Russell 2000 index was down 4.9 points or 0.99%, signifying a poor day for the blue chips as the small cap companies held their ground.
Energy and Materials were among the better performing sectors as crude fell by 6 cents to settle at $42.57. Gold rose by $16 and change settling at $857 while natural gas ended the day down at $5.85. The decline in energy prices have Chevron (CVX: 74.24, +0.28 (+0.38%)) warning investors about lower profits due to the sudden swing in crude prices, it will be interesting to see how investors react to it’s results.
Wal-Mart trimmed expectations as holiday sales proved to be unimpressive as January same store sales for the discount retailer are expected to be flat. The problem was caused by competitors pricing more like Wal-Mart, causing the company to loose some of it’s pricing edge. Wal-Mart did however outlast some of it’s competitors through the holidays, but nonetheless proved to disappoint the optimistic market.
Citigroup (C: 7.16, +0.01 (+0.14%)) and Democrats in the Senate signed an agreement to allow judges to readjust payment terms for borrowers who end up in bankruptcy court unable to pay their mortgage. This deal includes an important point that allows a judges to force home lenders to adjust the principal on mortgages held by indivudals who’s homes are valued less than their loan. Democrats hope that Citi’s support of the deal will bring in more large lenders to accepting such terms to help accelerate recovery in the real estate market.
Be sure to visit tomorrow for the Friday recap as Charles Petredis steps in to finish our the first full trading week of 2009.
-Hassan Chaudhry
Disclosure: The mutual fund the author is associated with is long WMT.
