Spread this message with Digg, Del.icio.us, Reddit, or Stumbleupon, and subscribe to the RSS Feed to track articles

Morning Rally on Wall Street

Published 11/05/09 Craig Harrington - Print Article
E-mail - editor@economyincisis.org

The feeling on Wall Street yesterday was mixed, and closing results showed clear apprehension by investors. The Dow led the gains with a 0.31 percent (30.23 points) gain on the day. This was followed by the S&P 500 which rose 0.10 percent (1.09 points) by the 4pm close. The NASDAQ actually finished in the red, dropping 0.09 percent (1.80 points).

Today however, has been much different on the Street. Stocks were expected to jump at the opening bell, but the rise through the first hour of trading has taken many by surprise. Each index was up more than 1 percent as of 10am, as investments ride a wave of good economic news.

Companies like Cisco, Toyota, and Time Warner each presented better-than-expected profits in the past quarter.

As Wall Street surges, some other sectors of the economy have showed encouraging signs of the recession settling.

According to Reuters, productivity in the United States is at a 6-year high. The Department of Labor said today productivity in the past quarter rose by an annualized rate of 9.5 percent, the quickest growth-rate since the second quarter of 2003.

Another factor pushing the markets is news released today that initial jobless claims have decreased to 512,000 for the week ended October 31 – down from the 532,000 reported for the previous week.

Productivity is on the rise and share values seem to be rallying, at least for the day, but the problem of unemployment is still ever-present. Late Wednesday the Senate approved yet another extension of federal unemployment benefits while also delaying the end of the homebuyer tax credit.

According to CNNMoney.com, most workers will get an additional 14 weeks added to their unemployment outlays. At the same time, consumers hoping to cash in on a tax credit of up to $8,000 when purchasing a new home will be given until April 30 to get their contractual agreements in order.

These benefit extensions and tax credit additions may help in the short run, but they are simply too expensive to continue indefinitely. The economy must start producing real jobs in the months ahead. Consumers must start choosing to purchase goods without the added advantage of government handouts. Until this happens the recession will never end, but for now the signs are at least encouraging.

Click here to contact your Representative in Congress.

Unless the above article is already copyrighted, this article is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License, EIC grants permission to use this article in whole or in part provided attribution is given, preferably in the form of a link back to EconomyInCrisis.org.