Wall Street Manages to Edge Wednesday on the Up

February 28, 2008

(Long Island, N.Y.) Wall Street investors’ reluctance to continue trading and stay active through the day cost the market earlier gains but still managed a slight increase as Wednesday’s trading closed down making it four sessions in a row with positive results for Wall Street and the stock market.

The Dow Jones Industrial received a respectable raise in earning 9.36 points or a 0.07 percent change from Tuesday’s trading deadline to settle at 12694.28 points. The NASDAQ composites also gained a 8.79 point increase for a 0.37 percent change upping its total points to 2353.78 while broader index Standard and Poor 500 retreated 1.27 points which is a 0.09 percent decrease from previous day trading to end with 1380.02 points.

Wednesday’s trading started well enough for Wall Street as news of the US government lifting an earlier restriction on Fannie Mae and Freddie Mac business portfolio gave a much needed boost to the troubled home loans sectors. Federal National Mortgage Association (FNMA) or more popularly known as Fannie Mae and Federal Home Loan Mortgage Corporation (FHLMC) known as Freddie Mac are the biggest financing arm for US home loans industry. Both companies are government-sponsored enterprise (GSE) and as a GSE, both are stockholder-owned corporation authorized to make loans and loan guarantees.

Financial experts agree that lifting financial restrictions to Fannie Mae and Freddie Mac would marginalize the losses incurred by the struggling home loan sector and give optimism to investors “The government is trying to do their part,” said Todd Leone, managing director of equity trading at Cowen & Co. “Together, this helps put a little more faith in the economy.”

Another key factor working for Wall Street was Federal Reserves chairman Ben Bernanke’s appearance at Capitol Hill in front of the House Financial Services Committee in which he expressed his agency’s intentions of slashing down interest rates by the middle of next month if that’s what it takes to stave of inflation for the US economy. “Act in a timely manner as needed to support growth and to provide adequate insurance against downside risks.” Bernanke said.

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