Foreign Market

Wednesday, the US stock market closed lower with the broad based selling is seen across the commodities sectors on the back of Federal Reserve call against inflation. Further, there was report that Merrill Lynch is suing XL Capital Assurance over default protection on $3 billion of collateralized debt obligations also led the investors to take profit booking. However, on the positive side, Morgan Stanley reported better than expected earnings which tops earning estimates. Moreover, the Federal Housing Enterprise in order to foster increased liquidity in the U.S. mortgage market was relaxing its excess capital restrictions on Fannie Mae and Freddie Mac.

The Dow Jones Industrial Average (DJIA) dropped by 293 points to close at 12,099.66. The S&P 500 (SPX) index decreased by 32.32 points to close at 1,298.42 and the NASDAQ Composite (RIXF) fell 58.30 points to close at 2,209.96.

Among the Dow''s 30 components, 29 components ended in red zone mainly led by the stocks like Chevron Corp and Exxon Mobil down by 4.9% and 4.6% respectively.

A total of more than 2.3bn shares were traded on the NASDAQ, with declining stocks outpaced the advancing stocks by 2 to 1. On NYSE around 5.3bn shares traded for the day, with declining stocks outpaced the advancing stocks by 2 to 1.

Crude oil futures for the month of April delivery closed lower by $4.94 at $104.48 per barrel on New York Mercantile Exchange. The crude prices fell as dollar strengthen its position as against its rival currencies. Further, the report from the Energy Department, which shows a sharp rise in the crude inventories, also led the prices to lose some grounds. EIA reported today that U.S. crude inventories rose less than expected, up 200,000 barrels to 311.8 million barrels in the week ending 14 March.

The gold prices for the month of April delivery dropped by $59 to settle at $945.30 an ounce on the New York Mercantile Exchange. This sharp fall in the gold prices was the largest one-day decline in almost two years.

Insider Buying Exceeds Selling, Signalling Market Bottom

NEW YORK/LONDON: August Busch III, an AT&T board member since 1980, bought $2.27 million of shares in the biggest US phone company last month, his largest purchase on record. Monsanto director William Parfet added to his holdings in the world’s no. 1 seed producer for the first time in eight years.

Chief executive officers, directors and other senior officials in corporate America are buying more of their companies’ shares than they’re selling for the first time since 1995, prompting growing confidence the stock market is poised to rally for the rest of the year.

The last seven times insiders bought more than they sold, between 1988 and 1995, the Standard & Poor’s 500 Index rallied an average 21% in the following 12 months, according to data compiled by the Washington Service. The purchases show executives believe the worst may be over after stocks suffered the biggest January drop in 18 years on signs the economy is in a recession.

“If it’s so bad, how come these guys are gobbling up their own companies’ stock? That’s the telltale indicator,” said Fritz Meyer, 57, the Denver-based senior market strategist at AIM Advisors, which manages about $166 billion. “Companies are in the best possible position to assess the economic outlook.”

Purchases by officers, directors and other senior managers of the 1,911 companies on the New York Stock Exchange reached $683 million in January, Securities and Exchange Commission filings compiled by the Washington Service, a Bethesda, Maryland-based research firm that tracks insider data for more than 500 mostly institutional clients, showed.

Perfect Record

Total purchases were 1.44 times more than sales, the first time in 13 years that insiders became net buyers, the data show. The S&P 500, the benchmark for American equities, hasn’t fallen in the 12 months after insiders bought more than they sold, according to Washington Service data that go back 20 years. Executives and directors may be underestimating the effect of the US economic slowdown on earnings, said Robin Hepworth, 44, at Allchurches Investment Management Services.

Fourth-quarter profits dropped an average 25% for the 289 members of the S&P 500 that have reported so far, data compiled by Bloomberg show. The economy expanded at a 0.6% annual rate in the quarter, half the pace of economists' forecasts, as home construction plunged the most in 26 years and banks including Citigroup and Merrill Lynch wrote off mortgage-related losses.