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What’s Happening On Wall Street.

What’s Happening On Wall Street.

US Stock Market Report for the Period July 25 – August 1, 2011
Over the last week, the continuing debt discussions have had a major impact not only on US stocks, but also at the international level as well. Stock markets activities were cautious at best as the world waited on a debt deal to be finalized. The month ended with news that a deal had been reached which resulted in stocks rising in the US and international markets. The immediate increases following the deal were tempered by cautious selling as the full impact of the deal is not yet known.

At the start of business on August 1, traders were cautiously optimistic. Figures for the main markets started higher than Friday, but began showing slight decreases later in the day. The Dow Jones Industrial average was down to 12,063.77, a fall of 79.47 points, while Standard & Poor dropped 10.70 points to 1,281.58. The Nasdaq also fell a bit by 16.75 points to 2,739.63.
The week of August 1 to 6 will no doubt be an important one as it relates to the global as well as US stock market. This period will see the real reaction to the debt deal as markets adjust to the perceived impact for the immediate future. By the end of the week hopefully the Senate and the House of Representatives would have signed off on the package.

Impact of GDP on Stock Market Performance
As if the threat of the US losing its triple A rating was not enough, the stock market also took a hit due to poor GDP (gross domestic product) data. The projected increase for the 2nd quarter was a modest 1.6 percent, but in actuality there was only a 1.3 percent increase according to figures from the Commerce Department. This modest figure has dampened projections since GDP is used to track economic growth.

Moody’s Reports Cash Hoarding
There have been reports of cash hoarding among some companies in response to the instability in the market. Moody’s has revealed that between 2009 to the end of 2010, there was an 11 percent increase in cash held by companies. The report indicates that as much as $1.24 trillion dollars is being held. Over a half of this money is invested or banked in foreign countries to be used for various purposes.
Senior vice president of Moody’s, Steve Oman stated that among the reasons for these holdings are investments in operations the companies have overseas, acquiring overseas interest and to benefit from overseas tax breaks, which they then repatriate to the US. Overall, the combination of the poor GDP figures and the debt ceiling crisis has placed the US stock market in the worst position it has been in for over a year.

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4 Responses to “What’s Happening On Wall Street.”

  1. Ionut Popa says:

    Last week I was watching the news about US debt pretty closely, hoping they come up with a solution, not just a postponement, like it happened.

    So I guess I’m back to the news then….
    Ionut Popa recently posted..Dell Latitude XT3 convertible tablet product page shows up onlineMy Profile

  2. joanne says:

    Looks like the stock market is not doing to well – hope it turns around.

  3. Mireille says:

    Well yesterday’s news of a rating downgrade is another proof that the US economy is not doing well. Let’s hope we turn this boat, but my opinion is that this cannot happen with some of the policies Washington is dishing out.
    Mireille recently posted..Vitamix Review and TipsMy Profile

  4. Carla
    Twitter: CCWordPlay
    says:

    The stock market has been on such a roller coaster lately!

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