Optimism High For 2011 Market Activity

US stock market investors are reportedly looking to the New Year with a measure of enthusiasm and optimism as economic recovery strategies, such as the much-touted QE2, are poised to be executed. Looking back at this time a year ago there were also signs encouraging optimism for economic recovery at that time, but these were dealt a blow by debt problems and economic turmoil in European countries, as well as less than promising results of stimulus spending, sparking fears for a ‘double dip’ in the economy by the middle of 2010. A fear of history repeating itself may act as somewhat of a restraint on investor confidence going into 2011, but analysts have indicated that there are solid reasons for optimism in the coming year.

With consumer spending being a driving force behind economic recovery, the increase in weekly work hour, which had been cut by employers as a cost-saving measure, is a welcome sign that the job market is likely to improve in 2011, although whether new jobs will be created remains to be seen. Moreover, corporate spending in capital equipment, such as information technology and communications products, spiked in November, indicating that corporate companies are investing in their infrastructure for the future. Additionally, stock prices showed a vast improvement at the end of the year, with a number of analysts predicting the return of substantial IPO activity in 2011.

2010 ended with the Standard & Poor’s 500 up 13 percent, the Dow Jones industrial average showing an increase of 11 percent and the Nasdaq composite rising by 17 percent. The top US Fortune 500 companies for 2010 were Dillards (#10); United Continental Holdings (#9); TRW Automotive Holdings (#8); Western Refining (#7); US Airways (#6); Cummins (#5); Tenneco (#4); Liberty Media (#3); Las Vegas Sands (#2); and CC Media Holdings (#1). Many of these companies have had to take drastic steps to, not only stay afloat, but thrive amid the financial turmoil of the past few years, and investors will no doubt be watching with keen interest as these, and other top stock market listed companies, tackle the challenges of a new year.