Stocks gain inspite of discouraging economic news
February 27, 2008
On the 26th of February the stocks closed for the day on a positive note. The stocks had gained for the third session in a row on a Tuesday to end the day higher. The main reason behind the rally was the upbeat news that came from IBM and the bond insurer MBIA. The good news that came from these companies was enough to counter the relatively discouraging economic reports that were released earlier in the session.
At the end of the day the Dow Jones industrial average had gone up by 0.9 percent and the Standard & Poor’s 500 was able to gain by 0.7 percent. The tech heavy NASDAQ composite also was able to gain more than 0.75 percent.
This is despite the fact that the bond prices in the country went up in the day. The crude oil price leaped by $1.65 a barrel to reach a record high. The U.S. dollar also came down to a record low with respect to the Euro.
The shares had gone down a bit in the morning when various economic reports started coming in. Most of the reports that were coming in were indicating the rising possibilities of a wholesale inflation, frail consumer confidence and further disturbances in the housing market. The investors however had the confidence to go forth with their investments after IBM announced that the company would purchase back $15 billion in shares. This news seemed to be enough to steer the stock throughout the early session. Stock maintained its climb in the later part of the session as well. Moody’s investor service said that they will uphold the bond insurer MBIA’s credit rating and this also helped the stocks in its gaining spree. As the day came to a close the stocks sliced the gains it had received.
The investors are now focusing their attention on Ben Bernanke, the chairman of the Federal Reserve, who will appear before the House Financial Services and Senate Bank committees on the 27th of February to discuss monitory policy. He will also talk about the current state of the nation’s economy.
On the 27th however the trading is bound to be affected by the various economic reports that will be released on the latest home sales and the durable goods orders let out. Another important economic data which is considered to affect the trading is the Government’s weekly energy inventory report that will come out on the 27th.
On the market doing well despite all the discouraging news that came out on the 26th the market analysts are saying that the market nowadays has gotten quite resilient. It seems as if the market is quite used to the gyrations now and that it is now trying to move forward.
It was IBM’s positive outlook together with the optimistic news about the bond insurer MBIA that gave the investors the courage to go forth and create an upbeat sentiment on Wall Street.
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