US Stock Market Analysis

US stocks ended another month well on a high note on Monday. This was boosted by Warren Buffett’s bullish comments. But the market could have reached a higher note if not for the increasing oil prices. Possibilities of the stocks hitting a standstill were indicated from the insufficient volume. The number of shares bought and sold in New York stock exchange was 7.29 billion. These shares included NYSE, Amex and Nasdaq. The number is a huge disappointment compared to last year’s figure. Last year the number shares traded daily on an average was 8.47 billion. 95.89 points were gained by Dow Jones Industrial Average. The Standard and Poor’s 500 Index gained 7.36 points. The Nasdaq Composite Index gained a nominal 1.22 points.

Reuters reported that President Barack Obama wished to discuss the budget issues with Republican House of Representatives Speaker John Boehner. Boehner was called by the President on Tuesday for this matter. White House spokesman Jay Carney reported to a White House news briefing that they had a good discussion. Carney said that he expected that the discussion will lead to some solutions. He said that the Congress has concentrated on some cuts which will probably be univocally supported by all. He further said that Obama will do his best to prevent a US government shutdown. Obama will never support cuts that bring US economy or national security under jeopardy. He would curtail investments so that future growth is not hindered.

Investors feel that rising oil prices will stall the process of the recovery of US economy. Their fear was confirmed by a drop of stocks on Tuesday. However .S. Federal Reserve Chairman Ben Bernanke expressed opposite opinion. According to him the oil prices will not affect the US market much. But investors did not buy his view. They fear that recent political turmoil in Libya will affect the world’s largest oil exporter Saudi Arabia and oil supply will suffer. Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut, said that the political disturbance in the Middle-East is currently the centre of attention. The most important issue is that whether Saudi Arabia will manage to remain unaffected.

The Dow Jones industrial average .DJI dropped 76.25 points, or 0.62 percent, to 12,150.09. The Nasdaq Composite Index .IXIC lost 26.54 points, or 0.95 percent, to 2,755.73. The Standard & Poor's 500 Index .SPX fell 10.56 points, or 0.80 percent, to 1,316.66.

As the muddle in the Middle-East continues to trouble US economy, statistics are showing that the world’s leading economy is restoring. In February the U.S. manufacturing sector grew at its fastest rate since May 2004. The market reported a mixed output of gains and losses. Utilities, healthcare and consumer staples gained as expected since these sectors are known to gain during troubled times. But the cyclical sectors had huge losses. These were marked indications of defensive stance in the market.

The S&P's consumer staples index .GSPS rose 0.12 percent, while materials .GSPM was off 1.3 percent and financials .GSPF fell 1.2 percent. Consumer staples Wal-Mart Stores Inc (WMT.N) and Coca-Cola Co (KO.N) helped shield the Dow. Wal-Mart rose 0.8 percent to $52.41, while Coca-Cola was up 1.9 percent to $65.12.