U.S. Markets Start Second Quarter on Positive Note as G-20 Summit Gets Underway
As leaders of what are deemed to be the world’s twenty largest economic powers gathered in London to discuss the worsening global financial crisis, with the goal of establishing new measures to stabilize the global economy, U.S. markets kicked off the new month, and second quarter of 2009, on a reasonably positive note, seemingly unaffected by the history-making G-20 summit taking place on Thursday. By the closing bell, the Dow Jones Industrial Average had risen 151.65 points, with the Nasdaq Composite adding 23.01 points and the Standard & Poor’s 500 climbing 12.92 points, being 1.99 percent, 1.51 percent and 1.62 percent respectively, thereby extending a four-week market rally.
Responding to data released by payrolls firm ADP that 742,000 jobs were lost in March, as opposed to the 663,000 job losses analysts had forecast, the market opened decidedly lower on Wednesday morning. However, as the day progressed, stock market investors began to be encouraged by the economic data trickling in and this was reflected in the market. The Institute of Supply Management’s March manufacturing index was 36.3 percent, being slightly above the forecast of 36.00 percent and higher than the 35.8 percent recorded for February. At any other time, this may not have been seen as overly significant, but in the current economic climate where many are clutching at straws, the ISM report, along with a better than expected pending home sales report, is seen as an indication that things are not deteriorating as quickly as anticipated, and may even be leveling out.
Whatever the U.S. markets reflected on Wednesday though, there is no denying that tough decisions need to be taken at the G-20 summit, and with the economy depending on a strengthening of the financial sector and thawing frozen consumer credit, it is agreed that decisions taken at the summit need to be implemented without delay. There are a multitude of varied opinions regarding the potential effectiveness of the summit, which includes leaders from Argentina, Australia, Brazil, Canada, China, European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom and United States, but all agree that something needs to be done – whether the agreement is reached as to what that “something” should be, remains to be seen.