Markets Fall as Weak Economic News Persists

Looking around the markets its hard to miss the sharp downward turn wall street has seen this morning. The Dow Jones has fallen 190 points heading into midday trading and the other indices have not fared much better. The NASDAQ has dropped more than 23 points while the S&P 500 has fallen nearly 20 points. A multitude of factors have affected the markets this morning lets take a look at what is driving the downward trend.

Federal Reserve Chairman Ben Bernanke stated yesterday in a press conference that the Fed would end its purchase of Treasury securities. After completing nearly $600 million in purchases over a three year period the bond buying program is done for now. The Fed plans to leave other existing aid programs in place. The announcement of the end of the bond buying program was just the tip of the iceberg Mr. Bernanke also announced new growth estimates for the next 18 months and those numbers are considerably lower than previously expected. The Fed did vote to maintain Interest rates near zero and stated they would not consider raising rates for at least two to three more meetings.

The number of Americans filing for unemployment rose last week to 429,000, economist were expecting about 14,000 less applications. Claims have increased between May and June implying the slow job market has yet to make the upswing. Initial unemployment claims have now remained above 400,000 for 11 weeks in a row. The number of those receiving benefits after the initial week is 3.7 million, economist were expecting that number to fall closer to 3.67 million.

Oil prices have falling $4.17 per barrel on news that 28 countries have agreed to release 60 million barrels of crude to the markets. The release is to help offset disruptions prompted by the ongoing Libyan conflict. This Marks the third time in history members of the International Energy Agency have agreed to release stock to the world market. The release is a mere fraction of the near 4 billion barrels held by members of the IEA. This move is a pre-emptive one to prevent a major spike in the price oil similar to the one that occurred in 2008.

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About MarcS

An experienced trader with a background in political science, Marc got his start as an individual trader surfing the old stock message boards. He is always on the lookout for the next big winner.

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