USmarket On Monday stock market puzzled many players.
19:20 10/24/2006

Many investors were puzzled by an event in the stock market on Monday. On a background of absence of significant macroeconomic and geopolitical news, oldest of exchange indexes Dow Jones Industrial Average, having overcome key levels of resistance, added yesterday at once 114,54 points, having fixed, thus, already the tenth (!) price record for last fifteen trading sessions.

 

The reason of record growth of stock indexes, in experts’ opinion, became corporate news, and first of all, from sector of retail trade.

Let's remind that papers of one of the world's largest network of hypermarkets Wal-Mart Stores Inc. rose in price +3,87 %, or $1,91 up to $51,28 for a share. The positive, which pushed to intensive purchases of shares, became news that the company began to approach questions of the further growth more attentively.

During last years shares of the company proved itself not from the best side as many consider that massive investments into technologies and shops have not justified themselves.

Wal-Mart Stores Inc. declared that would decrease growth of capital costs to a level of 2 % - 4 % a year from current 15 % - 20 %. Growth of the trading areas will slow down to 7,5 % from current 8 %.

So, next year the company plans to set in operation about 600 new shops. Half of them will be opened outside the USA.

These data were positively apprehended by investors of other retail networks. As a result Target shares were up $1,72 (+2,97 %) to $59,72 for a share, Kohl’s (NYSE: KSS) - $2,73 (+3,85 %) and J. C. Penny (NYSE: JCP) -$1,89 (+2,52 %).

And the index of networks of retail shops The S&P Retail Index grew 1,72 %.

 

It is remarkable that weak data of quarter results, after which Ford Motor Co. papers fell in price $0,11 to $7,90 for a share, pushed to purchases of papers of its competitors.

As a result the large beneficiary became General Motors Co. shares, which added in price +5,55 %, having risen $1,85 and having closed at a mark $35,19.

Thus papers of DaimlerChrysler added $0,07 (+0,13 %), Toyota Motor Corp. were up $1,82 (+1,57 %) to $117,42. And Honda Motor Co. shares grew $0,38 (+1,11 %) up to $34,61.

 

Shares, successfully reported the last week, of Google and 3M continued growth. So Google unreal high profits raised a degree of its capitalization at a new price top.

Let's remind that after growth almost by 8 % on Friday, the shares of Internet-searcher rose in price 4,6 % and finished day at a mark $480,78.

And after growth almost by 3 % on Friday conglomerate 3? added 2,1 % for a day and was fixed above a psychological level of 80 dollars.

Besides on Friday financial group Prudential increased a price reference point up to $92 on 3? papers.

 

As a result Dow-Jones index of New York stock exchange was up 111.42 points and is at a level 12113.79. NASDAQ index grew12.46 points and is at a level 2354.76. S&P 500 index rose 8.18 points and is at a level 1376.78.

And 30-years US Treasury notes’ yield was up 0.048 in comparison with the previous closing and makes 4.952.

 

We still recommend, having a waiting position, to wait for descending correction of key indexes.

 

 


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