Wall Street Advance to Open the Week
February 27, 2008
(Long Island, N.Y.) A nervous Stock Market edged up Monday giving investors optimism to start the week as Wall Street braces for key economic figures coming by the Department of Labor and Commerce. Fueling the upsurge for Wall Street was the Standard & Poor’s affirmation of Ambac Financial Group Inc and MBIA Inc credit ratings.
The Dow Jones Industrial was the biggest winner last Monday as it spiked almost 190 points overnight which is good for a 1.53 percent change from last Friday’s trading to end with 12,570.22 points. Broader stocks indexes NASDAQ and the Standard & Poor 500 also received relief from the market as the NASDAQ composites gained 24.13 points or 1.05 Percent change to settle with 2,327.48 points while the Standard and Poor 500 indexes gathered 18.69 points a 1.38 percent change to end with 1,371.80 points.
On Monday, the S&P also announced its affirmation of credit ratings for troubled bond insurers Ambac Financials and MBIA Inc which gave the market unexpected source of optimism. Traders worried that a downgrade of companies like Ambac Financials credit ratings would lead to billions of dollars in losses as already struggling Banks and Investment firms would be forced to write-down securities. “This is essentially evidence that S&P has signed off any tentative deal,” said Charlie Smith who is the chief investment officer at Fort Pitt Capital Group regarding S&P ratings decision.
Wall Street analysts surmise that to keep losses in the minimum for Bond insurer firms, they need to be kept intact to avoid subsequent outbreak of investors unwilling to take a hit for the company. They also noted that further positive developments for struggling credit companies could help stabilize a volatile market. “Even the smallest bit of positive news and the market takes off, investors get excited if they sense a bottom in the financials because they’ve been the Achilles’ heel of this market.” said Chris Johnson, president of Johnson Research Group.
Posted by News LI Editor · Filed Under Business
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