Tuesday, October 17, 2006

Dow Touching 12,000 Level

The Dow Jones Industrial Average ($INDU) almost touched the 12,000 points on 16 Oct 2006.

On 16 Oct 2006, the Dow closed up 20.09 points, or 0.17%, to reach 11,980.60. In the final hour of trading, the index reached a record trading high of 11,997.25.

However, on 17 Oct 2006, the Dow ended down 31 points to 11,950. The setback was partly due to the bigger-than-expected 0.6% jump in Sep 2006 in the core inflation, which excludes energy and food. Investors were concerned this might prompt the Federal Reserve to raise interest rates next week.

Moreover, the Federal Reserve reported that that industrial output dropped by 0.6% in Sep 2006, a much bigger decline than the 0.1% drop that Wall Street had anticipated. Slowing production in the nation's factory was in reaction to the overall economic slowdown.

In another development, Yahoo! (YHOO) reported earnings results for the 3rd Quarter (Sep 2006) on 17 Oct 2006 after-market-close. EPS was $0.11 per share, in-line with Reuters Estimates consensus of $0.11; revenues rose 20.3% yr/yr to $1.12 bln vs the $1.14 bln consensus. The Co. issued downside guidance for Q4, sees Q4 revenue of $1.15-1.27 bln vs. $1.3 bln consensus.

YHOO share price did not plunge after the earnings announcement. YHOO had earlier shed more than $3.00 on 19 Sep 2006 when it said it saw slowing/weakness growth in Auto's and Financial services advertising which might impact the 3rd quarter earnings at bottom half of range.