Market Recap - February 6, 2009

What a day on Wall Street! Amid another horrible jobs report for the month of January, the major indexes were up big today on hope that the Government’s stimulus plan will be passed through the Senate and will provide the economic spark that the United States desperately needs.  The Dow Jones Industrial Average jumped 217.52 points (2.70%) and the S&P 500 also increased 22.75 points (2.69%).   The huge gains today helped the major indexes achieve their first winning week after four weeks of straight losses. 

There was definitely enough bad news to justify a drop in the markets today.  The Labor Department said that 598,000 jobs were cut in January, the most since 1974! The unemployment rate is at an astounding 7.6% now, the highest since 1992.  But, this depressing news didn’t keep investors from looking forward to see what the Government will do about the country’s economic issues.

The Senate is expected to vote on a $937 billion stimulus package either tonight or sometime this weekend.  The Senate bill will focus on tax cuts and government spending.  Timothy Geithner, the new Treasury Secretary, is also planning on announcing some changes to the $700 billion financial rescue fund (TARP) on Monday.  Investors are optimistic that these changes will influence banks to begin lending again, and as a result, boost consumer spending and spark the economy.   

Monday will definitely be a very interesting day for the markets, as the news over the weekend about the stimulus plan will definitely make a huge impact on what happens.  If the stimulus plan passes, the markets will most probably jump higher.  But, if the stimulus plan does not pass in the Senate over the weekend and gets stopped in its tracks by the fiscal conservatives, the markets will look ugly on Monday.  

Have a great weekend

 

Niki Pezeshki

College Trillionaire