Wall Street Expects Little Consistency as Trading Week Opens

February 18, 2008

(Long Island, N.Y.) Amidst a brazen economic conundrum, Wall Street hopes to instill stability in a so far volatile market to start the week with hopes of upturning a weakened economy and finally establishing a positive trend to help fend off threats of recession.

Investors are playing a waiting game with the market before they increase their activity; a move exemplified in last week’s showing as traders where busy during the first 3 days with positive gains heading their way. As the week progressed, external factors such as negative quarterly reports from major companies and pessimistic expectations from Federal Reserve chairman Ben Bernanke factored in heavily as the market lost momentum last Thursday.

“We may not have hit the bottom, but people seem to be looking for things to buy rather than things to dump, things might get worse before they get better, but you’ve got to buy stock when things look worst.” said Alexander Paris an economist and market analyst for Barrington Research in Chicago.

As a whole, Last week’s trading netted positive gains for Wall Street. The Dow Jones Industrial finished 1.36 percent higher than the previous week while the Standard and Poor 500 rose 1.40 percent and the NASDAQ composites gained 0.74 percent by week’s end.

The slight increase in last week’s trading was reflective to some positive developments concerning the US economy. The US Labor Department announced a lower unemployment claim rate which enthralled investors early on the week while the Department of Commerce chimed in with its own positive report of a higher sales report for the month of January. Wall Street needs similar reports this week to continue a commendable run.

Meanwhile, the Federal Reserve last week released reports of their January 29th-30th meetings which netted interest rates cut by the Central Bank. The announcement indicated a weakening in employment rates in the US, tightening of credit for businesses and households and seemingly stressed financial markets.

“It seems to be, as the data unfolds, they’ll have no choice but to cut further. Though, that given how much policy makers have already slashed rates and their persistent worries about inflation, they don’t have much more to go.” ,” said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co.

Posted by News LI Editor · Edited by Brianna - Filed Under Money