Markets Picking Up Some Positives |
US stocks rose during trading in New York yesterday, forming a peak in the best eight-day growth for the Standard & Poor’s 500 Index since 2009 amid expectations that the economy will continue to recover. However, DT Trading analysts observed that such growth still didn’t prevent speculation arising as a result of the antitrust suit the US Justice Department brought against AT&T Inc (T).
Shares of the Ford Motor Co (F) and Alcoa Inc went up 2.3% each since the companies most tied to the real economy experienced growth. Joy Global Inc (JOYG) added 1.3% growth after the mining equipment producer published its income forecast which exceeds analysts’ expectations. Shares of AT&T fell 3.9%, limiting the growth of the Broad Market Index. This occurred after the US government filed a suit to prevent the company’s planned purchase of competitor T-Mobile USA Inc. The government said that the purchase would hinder competition on the wireless communications market. DT Trading analysts noted that the S&P 500 nevertheless stayed in the positive zone. The index added 0.5% to reach 1,218.89 as of 4:00PM in New York after an earlier 1.5% growth spurt. Since August 19, the Index’s upside gained 8.5%, ending a consecutive four-month drop, the longest since March 2008. Mark Luschini, head investment strategist with Janney Montgomery Scott LLC in Philadelpia, said that “…given the overall levels of volatility, you know you can wake up and the market is easily up or down 300 points. Part of that uncertainty is that investors are dealing with the heavy hand of government intervention infusing itself in the capital markets.”
General stocks got the most support after a report on business activity and production orders showed that production in the US grew at a faster pace in July than economists had predicted. “The economy is not falling off a cliff, and at the same time, policy makers are aware that growth is slow and they are prepared to do something to accelerate it,” said Peter Jankovskis, who helps to manage about $2.6 billion in capital at Oakbrook Investments in Lisle, Illinois. “Much of the selling that we’ve experienced was overdone and left the market poised for a rally when sentiment began to change,” he added.
Nouriel Roubini, an economic forecaster and co-founder and chairman of Roubini Global Economics LLC, expressed a contradicting opinion, saying that “we’re going into a recession based on my numbers” while the Federal Reserve and other authorities are not in a position to lend emergency assistance. “We have reached stall speed in the economy,” Roubini said. “Unfortunately we are running out of policy tools” in the U.S. and European governments don’t have any more resources left to bail out their troubled banks, said Roubini, who is also a professor at New York University’s Stern School of Business. This year, economic indicators “are coming out worse and worse” and “the markets are going to fizzle out,” Roubini said.
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