Wall Street was extremely volatile today, as stocks drastically climbed and fell throughout the trading session, but eventually ended with a loss. The Dow Jones Industrial Average fell 80.05 points (-1.09%) and the S&P also ended down 8.24 points (-1.07%).
One of the main factors that pulled stocks down came from an unexpectedly bad home sales report. Home sales in January fell to their lowest levels since 1997, as potential buyers worried about their job security and many potential buyers held off until they could hear more from Obama’s housing market plans. In order to try to boost demand in the housing market, government officials announced a new $8,000 tax credit for first-time buyers today.
Factors that pushed came mostly from government help to the banking and financial sector. The government confirmed that it would buy preferred shares from banks using TARP money, thus giving the banks more capital to work with. In addition, Federal Reserve Chairman Ben Bernanke reassured investors by claiming that banks will not be nationalized.
The volatility today came from a sense of uncertainty, as investors just don’t know where to look for clues anymore. With horrible housing numbers but reassurance from the government for banks, there are many factors pulling some stocks down and other factors simultaneously pushing other stocks up.
Until tomorrow,
Niki Pezeshki
College Trillionaire
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