The major indexes rose for a second consecutive day as the Dow Jones Industrial Average rose 58.7 points (.72%) to reach 8174.73 and the S&P gained 9.14 points (1.09%) to settle at 845.71. Trading started off downward as the Consumer Confidence Index for January was released, but a rise in the markets was later spurred on by better than expected earnings reports.
The Consumer Confidence Index has been around since 1967. It’s designed to give the government and investors an indication of the willingness of consumers to spend and stimulate the economy (or save and hold the economy back). The Index hit 37.7 for January, which is the lowest it has ever been. High unemployment numbers, declining home prices, poor earnings report, and the extending economic recession has led to an overwhelming lack of consumer confidence. The bad news wasn’t a surprise for investors, though, and the market moved upwards later in the day as earnings reports came out.
Some big names, including United States Steel Corp. (X), American Express (AXP), and Netflix (NFLX), turned out refreshing earnings numbers that were actually profitable. Investors and analysts were especially excited by the news that United States Steel made money during the fourth quarter, as an increase in steel use can be an early indicator of economic upturn. American Express’ share price gained $1.48 (9.74%) on the day, and it proved that financial companies can still succeed when they report 4th-quarter profits these days (even though these profits were 79% less than those of the 3rd quarter).
The mix of good and bad news led to another conflicted day on Wall Street and most investors stuck with the good. Investors appear to be battle-hardened as they resisted yet another piece of bad news today in the poor Consumer Confidence Index. Earnings reports will continue to come out the entire week and you can expect any good reports to be followed with good market movements.
-Matt Schwartz
College Trillionaire
Posts
No comments:
Post a Comment