US Markets Respond to Economic Recovery Indications

More good news for markets came from the Federal Reserve when it was revealed that the US economy sustained its gradual improvement through the months of October and November, with expectations that this trend will continue for some time – slow, but steady. The Fed’s Beige Book, which provides a profile of economic conditions across all market sectors for twelve districts, confirmed the slow, but steady, growth trend in the economy.

Improved employment statistics, including the 39,000 private sector jobs gained in November, further boosted investor confidence, which in turn had a positive effect on stock market indicators on Wednesday December 1. The Dow streaked ahead with 249 points to close at 11,256; the Standard & Poor’s 500 climbed 25 points to close at 1,206; and the Nasdaq rose 51 points to 2,549, being 2.3%, 2.2% and 2% respectively. For the Dow, Wednesday’s result was its largest one-day boost since the beginning of September, with all 30 components showing an improvement. Leading the pack was Home Depot with an increase close to 5%, with Microsoft, United Technologies and Alcoa all gaining more than 3%.

So, despite adverse economic conditions in Europe, with Spain and Portugal likely to seek aid from the EU, as well as the £72 billion bailout of Ireland, US markets found reason to be quietly upbeat about US economic recovery as reflected in the major stock market indicators, and this is likely to have long-range positive effects on the lives of US citizens.