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- US Job Market, Europe Crisis, Earnings of Interest in Week Ahead - 31 October 2011
- Europe Resolution Boosts Investor Confidence - 27 October 2011
- Proposed Eurozone Bailout Impacts Wall Street - 13 October 2011
- European Debt Crisis Impacts Wall Street - 12 September 2011
- Corporate Results Boost Markets - 2 may 2011
- Markets Rally Wednesday on Encouraging Job Market Reports - 25 November 2010
- BP, Goldman Sachs, United & Continental Feature in Week Ahead - 3 may 2010
With analysts warning that the current climate of market uncertainty is far from over, it appears that Wall Street is set to end the month of October on a high, with the Dow recording the greatest October gain ever. Despite the fact that French President Nicolas Sarkozy has been reported as saying that Greece should never have been permitted entrance to the Eurozone in 2001, European authorities have reached an agreement and mapped out a plan to rescue ailing European countries, including Greece, Italy and Spain. This has done much to boost confidence among Wall Street investors who will continue to keep an alert eye on Europe as leaders of nations forming the G-20 gather in Cannes, with the debt crisis a highlight on the agenda for discussion.
Tuesday saw a sharp drop in US stocks ahead of the EU summit to be held the following day. By Wednesday afternoon investors began gaining confidence that European authorities would agree upon a workable solution to Eurozone woes. Following an uneasy day on Wall Street, all major indexes ended the trading day higher with the S&P 500 moving up 13 points, the Dow Jones industrial average adding 162 points, and the Nasdaq composite climbing 12 points, being 1 percent, 1.4 percent and 0.5 percent respectively. Although details of the plan to bring Europe's debt crisis under control, and to assist its banking sector, still need clarification and fleshing out, the very fact that an agreement has been reached on how to move forward was enough to boost investor confidence to a degree.
Stocks rose sharply on Wednesday before dropping slightly, but still ending the day at an encouraging high, with the rally believed to have been fuelled by optimism regarding the latest proposal to recapitalize banks in Europe. Investor sentiment appears to have shifted from its doom-and-gloom outlook last week, to one of hope that a TARP-styled rescue plan will be put in place for European banks. President of the European Commission, Jose Manuel Barroso was reported as stating Wednesday that the resolution of this ongoing crisis needs immediate action from policymakers. He also pointed out that banks that fail to meet capital requirements should not be permitted to pay out dividends and bonuses.
Rumors that Greece is likely to default on its enormous debt caused ripples of apprehension around the financial world, resulting in investors selling off stocks, and US markets dropping sharply on Friday. Speculation is rife that the country may very well not get the next installment of bailout funds allocated by the European Union, the European Central Bank and the International Monetary Fund – at least until the so-called troika is assured that austerity measures in Greece are going to achieve what they have set out to do, reduce the government’s debt. All seventeen nations using the euro as currency – the Eurozone – need to approve of further bailout funds being issued to Greece. While all eyes are on Greece at present, Portugal, Ireland, Spain and Italy are also struggling, and analysts have expressed doubts that the European Financial Stability Facility (EFSF) will be able to pull all these ailing economies through the current financial crisis.
Following the negative impact recent events in Japan have had on markets worldwide, investors have been given a reason for optimism as Wall Street recorded the best month of 2011 and finished last week, and the month of April, on a high note. The Dow Jones industrial average finished at 12,811 representing an increase of 0.4% (47 points) for the day, 2.4% for the week, and 4.3% for the month. The Standard & Poor's 500 ended the day 0.2% (3 points) higher, with an increase of 2% for the week and 3.3% for the month. The Nasdaq composite rose less than 0.1% (a point) for the day, but clocked up a rise of 1.9% for the week, and 4.2% for the month of April.
Ever mindful of the fact that consumer spending is considered to be the backbone of a country's economy, on Thursday US markets rallied by more than one percent in response to the substantial drop in unemployment claims, which indicate an improvement in the embattled job market. While other indicators play a role in influencing markets, either positively or negatively, many agree that the job market, as monitored by unemployment claims, continuing claims and other information, tend to have a significant effect on markets, with a drop in jobless claims acting as a booster, and an increase in claims putting the brakes on. This good news about the job market couldn’t have come at a better time , with Black Friday right at the doorstep and retailers set to battle for the lion's share of consumer dollars.
The upward swing of the market over the past two months, with the Dow enjoying its longest run of positive performance in six years, was brought to an end last week. Heading into the month of May, there varying opinions among stock market investors as to whether the market is entering bear territory, or if this is a minor setback that will be resolved in the coming week.
- Video: Sarah Quinlan on European Debt Crisis, Outlook
- Tuesday 22 May 2012, 8:39 am - Video: Pimco's Clarida on Global Economy, Greece
- Tuesday 22 May 2012, 8:15 am - Video: CDU's Fuchs on Level of Euro, Contagion Risks
- Tuesday 22 May 2012, 8:03 am - Video: Europe Banks Shunned in Franklin's Stocks Portfolio
- Tuesday 22 May 2012, 7:53 am - Video: Scholnick Focused on Facebook's Long-Term Value
- Tuesday 22 May 2012, 7:48 am - Video: AlixPartners's Crawford on Global Economy, Strategy
- Tuesday 22 May 2012, 7:43 am
- Jobs Market Continues to Sway Investors
- Thursday 3 may 2012 - Features - July 2014 Compliance for Volcker Rule
- Friday 20 April 2012 - Markets - JOBS Act - Easing Regulations for Growth
- Thursday 5 April 2012 - News - FHFA to Bulk-Sell Foreclosed Homes
- Thursday 22 March 2012 - News - High Frequency Trading
- Thursday 8 March 2012 - Features - Stock Exchange Listing and Delisting
- Thursday 23 February 2012 - Features


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