Saturday, October 16, 2010
Recent DOW and stock trends show mixed results
The banking sector was weak, but the technology sector was impressive. Overall, the DOW dropped 32 points, mostly due to housing markets and recent foreclosure trends. Google, though, posted substantial gains as shares of the tech company increased 11 percent. Remarks made by FED chief Ben Bernanke impacted many investors and financial analysts. Bernanke alluded, not very subtly, that the FED is now less concerned with inflation and will act to ensure that interest rates stay low in the US economy. According to the article, this means 'quantitative easing', as the FED will soon begin to buy US treasuries to pump more money into the economy. Analysts are remarking that there is no doubt the FED will do this, but that the only question regards the magnitude of the FED's purchases.
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The problem is even though interest rates are low, companies and people are saving money and not investing it. It would be better if people were consuming and investing more, which would help us get out of this economical slump. The good news is though, that the stock market shows that it is going up, which is usually a good economic indicator.
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