US stocks close mixed on downgrades of market heavyweights

Stock Markets

Australian shares are poised to open marginally higher today after US stocks ended up mixed overnight, with most stocks paring losses into the close as investors reacted to the downgrades of Boeing (BA) and General Electric (GE). This week also marks the start of the first-quarter earnings season in the US, and it is estimated that the first-quarter profits for the S&P 500 will fall by 2.2% compared to the previous corresponding period. The US Commerce Department reported that factory good orders dropped by 0.5% in February as a result of weak orders for machinery, transportation equipment and electronic products. This figure was better than economists' forecasts for a drop of 0.6% for the month.

Wall Street's major indexes closed mixed overnight, with the Dow Jones dragged lower following the recent downgrade of market heavyweight Boeing which saw its stock price drop 4.4%. The Dow Jones consequently closed in negative territory, with the index losing 83.97 (-0.32%) points. Conversely, the S&P 500 and NASDAQ 100 ended Monday's session up 3.03 (+0.10%) and 15.19 (+0.19%) points respectively. Eight S&P 500 companies are expected to release their earnings report this week, with three of the country's biggest banks expected to report on Friday. Investors will be focused on the earnings reports from the major banks as they would provide a strong signal about the overall health of the US economy.

The benchmark S&P/ASX200 index closed 40.1 points (+0.65%) higher on Monday, with gains in the index bolstered by US/China trade optimism and Friday's solid US jobs report. The materials and health care sectors posted the highest percentage gains yesterday.  

ASX 200 futures are currently up 9 points.

Today's data releases: AUS Housing finance February

Commodities and Currencies

Oil prices continued to rally overnight as a resurgence of fighting in Libya this week has raised concerns about oil supply with 300,000 to 400,000 barrels of oil supply at risk.  Brent crude and WTI crude closed in positive territory at US$71.10 (+1.08%) and US$64.45 (+0.08%) respectively.

Iron ore prices are up 2.6% at US$95.30 per tonne.

The spot price of gold is currently up 0.52% at US$1298.41.

The AUD is currently down 0.1% at US71.20¢.

This article was written by Mithun Fernando – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via mithun.fernando@rivkin.com.au or by phoning +612 8302 3633.