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• Monday, 15 March 2010

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• Markets Rally Despite First Quarter Economic Data - 30 April 2009

Wednesday saw Wall Street rally as the Dow Jones industrial average rose 2.11 percent, or 168.78 to end the day at 8,185.73, while the Standard & Poor’s 500 increased 2.16 percent, or 18.48 points to 873.64, and the Nasdaq composite advanced 2.28 percent, or 38.13 points, to 1,711.94. The rally was quite unexpected when taking into account the dismal data revealing that the United States economy contracted in the first quarter of 2009 at an annualized rate of 6.1 percent. Nevertheless, investors were encouraged by higher consumer spending which they took to be an indicator that the recession may end soon. These hopes were boosted when, following a two day meeting of its policy making committee, the Federal Reserve noted that, although the U.S. economy is still contracting, there were signs that the pace of deterioration was slowing down.

• Swine Flu Outbreak, U.S. Government’s Stress Test Impact on U.S. Markets - 28 April 2009

While health authorities grapple with preventing the spread of the swine-flu outbreak, it could not have come at a worse time for the already battered global economy. Stock market analysts are hopeful that, as with past crises such as SARS and bird flu, this outbreak will be short lived, however, it has already impacted negatively on both U.S. and world markets, and investors will no doubt be keeping a close eye on developments. Some see Monday’s Wall Street sell-off as a case of investors cashing in profits they may have accumulated in recent weeks when markets were rallying, and the day’s light trade supports this. Yet others believe the sell-off was motivated by fear and this view appears to be supported by the fact that stocks relating to airlines and other travel-related business took the hardest knock as authorities step up travel security measures. The possibility that the swine-flu outbreak is swaying markets can be seen in the increase in pharmaceutical stocks, most notably Gilead Sciences and GlaxoSmithKline – both manufacturers of flu treatments.

• Financial Sector Continues to Drive Markets as Investors Wait for Stress Test Results - 23 April 2009

Investor confidence was dealt a blow on Wednesday bringing the Wall Street rally to an end when Morgan Stanley’s dismal results revived concerns about the stability of the banking sector and the economy in general. Having posted its second straight quarterly loss and slashed its dividend, citing the deteriorating commercial real estate as a negative factor, Morgan Stanley slid nine percent closing at $22.44.

• Wall Street Extends Its Rally Ahead of Fortune 500 Results - 20 April 2009

Friday saw Wall Street sustaining its now six-week long rally, ending the week with a meager advance, but an advance nonetheless. Earlier in the week both JPMorgan Chase and Goldman Sachs had reported positive first quarter results, and investor confidence in the financial sector was further boosted as Citigroup posted better than expected results, adding weight to the speculation that things may be bottoming out. The three Fortune 500 companies reported results that, although being lower than the same time last year, topped all estimates. As is the case with Goldman Sachs, JPMorgan Chase has indicated that it would be looking at repaying TARP funds "as soon as possible".

• Growing Confidence in U.S. Financial Sector Boosts Stocks - 16 April 2009

Staging a late in the day rally, the Dow Jones Industrial Average ended Wednesday with a 1.4 percent gain, while the Standard & Poor’s 500 rose 1.3 percent and the Nasdaq Composite Index gained 0.1 percent. Technology stocks, which had drawn buyers during the month, were dealt a blow by Intel Corp’s reticent forecast. However, investors looking for stocks that are likely to experience a rebound, were encouraged by the Federal Reserve report on the economy, which prompted stock market traders to buy up financial sector and consumer product stocks.

• Goldman Sachs Starts Reporting of First Quarter Results on a Positive Note - 14 April 2009

Goldman Sachs was set to release its first quarter earnings on Tuesday, but apparently the news was too good not to share and the New York-based investment giant announced on Monday that it earned a $1.81 billion profit for the quarter ending 31 March. This was an impressive recovery for the company after having reported a loss for the last quarter of 2008 – its first since it was listed as a public company in 1999.

• Dogs of the Dow: A Reliable Investment Strategy? - 9 April 2009

In the current economic climate, where stock market traders have come to expect the unexpected, many are re-examining their investment strategies. A strategy that has established a favorable track record is the Dogs of the Dow, which focuses on the selection of stocks from the Dow Jones Industrial Average (DJI) with dividends that are the highest fraction of their price. At the beginning of the year, investors using the Dogs of the Dow strategy will pick ten stocks from the thirty DJI components, based on their dividend yields, and will hold those stocks until the end of the year.

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