Stock Battles Forecasted
March 7, 2008
Wall Street has worked its way back up after sustaining losses in the early parts of Wednesday. As the day came to a close, stocks were able to gain some pace and cut down on initial losses. The reason for the tough session of trading early in the day was because of frail “beige book” report with which the Federal Reserve had come out. The report is basically about the nation’s economy and about bond insurer Ambac’s restructuring plan.
The day also saw the oil prices break previous highs and create a new record. The price of oil at the end of the day was almost $104 per barrels. The price of gold also rose higher to inch closer to the sensitive $1000 per ounce level.
After trading had closed, the Dow Jones industrial average had managed to gain 0.3%, while the Standard & Poor’s 500 index and the tech heavy NASDAQ composite gained 0.5%.
Stocks were quite a high again on Thursday, when numerous monthly sales data figures were released from retailers. The day also brought in the weekly report of unemployment claims and the home trade index which was pending.
Throughout the afternoon session, the three main indexes managed to gain as a result of the healthy services sector. This greatly helped the investors turn a blind eye to weak reports for factory orders, as well as employment details in the private sector. Another aspect to the market keeping its head above water was news that banks were trying to negotiate a deal which would help in keeping bond insurer, Ambac, afloat.
Wall Street took a small hit when the company failed to announce a bailout scheme. Ambac instead said that it would be raising almost $1.5 billion by offering common stock and by undergoing a restructure of the company. Prior to the announcement the trading of the Ambac shares had been put to a halt, though once the news came out of the company’s plans, Ambac’s stocks took a dive by almost 15% during the afternoon.
News from the company also took down some other financial stocks and sections of the broader market as well. But Wall Street was able to fight its way back to its earlier position by the end of the day. This is when the Federal report came out, which reported that out of the 12 districts in the country most are facing an economic slowdown which has been occurring ever since the beginning of the year.
Although not all reports are showing degradation in the economy, the general state of the economy is not all that good. The investors however are trying their best to ignore the ongoing talks about the recession and to go about with their business.
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