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Markets Slide at Open

Published 11/03/09 Craig Harrington - Print Article
E-mail - editor@economyincisis.org

Last week Wall Street was in tumult as investors questioned the legitimacy of the nearly seven-month run. The markets were at 2009 highs before being battered by loses in a rally-killing sell off. However, the month of November may have breathed new life into the busted market rally, as evidenced by gains yesterday.

Markets charged to early gains before dropping back into the red Monday afternoon, but as the 4pm close drew closer they rallied once again. The Dow led the day gaining 0.79 percent (76.71 points), followed by a 0.65 percent gain on the S&P (6.69 points), and a 0.20 percent gain on the NASDAQ (4.09 points).

These increases were hardly enough to offset last week’s losses, but it seemed like a good place to start. Unfortunately, the indication from overnight futures and world market movement during the day was that stocks would slide at the opening bell Tuesday.

According to Bloomberg News, one of the primary reasons for the rough start on Wall Street was the declines among a cohort of major international banks. American Bank of America and Citigroup, as well as Switzerland’s UBS, each showed quarterly declines. Further dampening the mood on Wall Street was Morgan Stanley’s decision to further downgrade tech giant Intel.

However, the slide Tuesday could be abated later in the week. According to CNNMoney.com, the Federal Reserve committee meeting slated to begin today will have a huge impact on domestic investment markets. As a result the Fed is expected to continue its support for investments, keeping rates low and encouraging new lending.

Rounding out the news, a slight rise in dollar values against world currencies has led to a similarly slight drop in oil prices. Oil futures have been trading at $78 per barrel for much of the day, and prices have fallen steadily since reaching nearly $82 per barrel last month. Despite a decline in oil prices, the national average for a gallon of gasoline is roughly $0.22 higher today than at this time last month, according to AAA’s FuelGaugeReport.com.

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