Portfolio Crafter - Market Commentary 5/26/05
May 26th, 2005 / 9:55 pm / by portfoliocrafter
After investors got news about the GDP economic report, U.S stocks rose ending session higher. The Dow rose 79.80 points, to close at 10,537.60. Besides, both the Nasdaq, and the S&P posted gains. The Nasdaq closed at 2,071.24, after rising 21.07 points, while the S&P rose 7.61 points, to close at 1,197.62.
According to the Commerce Department, the U.S economy grew at a 3.5 percent annual rate in the first quarter. Besides, inflation was unrevised from the initial estimate. The personal consumption expenditure index rose 2.1 percent, while the core personal consumption expenditure price index rose 2.2 percent. But, business investment was revised to a 3.5 percent gain, compared with the initial estimate of a 4.7 percent rise. This is the slowest pace of investment since the first quarter of 2003 and is down sharply from a 14.5 percent rise in the fourth quarter.
Shares of American International Group (AIG) rose 3 percent to $55.71. Now, New York Attorney General Eliot Spitzer sued AIG claiming that the insurer used fraudulent transactions to manipulate its financial statements. Greenberg and Smith, both executives of AIG, were named as defendants in the civil complaint. But, the investigations precipitated the departure of Greenberg in March and forced the insurer to admit a series of accounting frauds that helped to artificially inflate its net worth by $2.7 billion.
Novel Inc., which sells network software and consulting services, dropped 45 cents to $5.83. But, the company said that it broke even in the second quarter on a per-share basis. Besides, Boston Scientific Corp. tumbled for a second day, retreating $1.30 to $28.16, marking the biggest drop in the S&P. The largest maker of heart stents reduced its 2005 earnings forecast because of high competition and high acquisition costs. On the other hand, Boeing Co. gained $1.54 to $62.99, since Indonesia’s PT Lion Mentari Airline announced that it will buy $3.9 billion worth of Boeing’s 737-model aircraft.
All the best,
Manuel Jesus-Backus
The Portfolio Crafter
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