I believe that the stock market will always do this. It will always drop and rise; however, sometimes there may be reasons to it but hopefully it will rise again. Lets hope that this drop in the market isn't so dramatic.
Malik Shehade
Thursday, May 20, 2010
Stocks dive, Dow off 376 on world economic worries
The stocks have taken a big dip on the charts recently. There have been fears growing about Europe's debt crisis could spread around the world. The U.S. economic recover can be undermined. The Dow Jones Industrial average has fallen about 376 points, this was the biggest point drop since February of 2009. There have been showings of losses for 2010. Interest rates have fallen sharply in the Treasury market. Also the number of unemployment has increased in the past week or so.
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5 comments:
With the European recession, the stock should fall due to less spending from Europe and a decrease in exports. We need to find a way to help Europe recover so they can consume our exports and then we can try to fully recover from our recession. I think this is just a sign from the European market, but it is one we shouldn't ignore.
I agree with Derek in that we shouldn't ignore this issue. Because each nation is so interconnected to one another,its just like a domino effect. if one country falls, the rest will soon follow. With the value of the EU dropping, Europe is now the deciding factor in our recovery, i believe. At first Ithought these were a result of panic buying, but as Todd Colvin said in this article "these are not panic losses [they] are taking some profits off the table and taking some capital [cash or treasury] where they know it will be safe."
I can't blame these investors because if I invested, I would probably do the same thing. It seems as though outside help will be needed in order for Euorope to gain some confidence back since rumors can easily destroy a nation or a company, like Bear Sterns.
"I believe that the stock market will always do this. It will always drop and rise; however, sometimes there may be reasons to it but hopefully it will rise again. Lets hope that this drop in the market isn't so dramatic."
Malik, the stock market does not always drop 376 points. Even you noted that the last time the stock market dipped this much was in February of 2009. Also, this drop is actaually quite dramatic and is widespread around the globe. What I do agree with you on is that the stock market will always drop or rise, however there are always going to be reasons for it.
Char.tay, since the EU currency is dropping, it is a perfect time to invest in the foreign exchange market. I personally know a lucky investor, who has invested in the EU/Aus. That's the plus side about trading in the foreign exchange market, if you know that these countries are starting to fail, you can buy another currency and profit off of nation's losses, just like Germany's positive assets compared to Greece's recession. When there is a loser, there is always a winner.
"I don't think the European recession will affect the United States greatly, but it will be a minor affect in regards to spending."
Alexandra, the European recession will hurt the United States greatly considering they are the largest US consumers. I do not know what you mean by the stock market going back to "normal." Also I don't think other countries are going to try and "balance" out the economy by spending more if no one can even afford to spend a little.
-Brian Kawamoto
I think this is really relevant to the stuff that we have been learning in econ lately about the Europe's, or more specifically Greece's, large debts. Europe is experiencing something so similar to the United States (spending more then producing) that it seems inevitable that the United States would be affected by the problems in Europe. This only makes the initial problems worse, because people in Europe have already stopped spending on exports from the United States, greatly affecting the US's economy. Also, United States stock holders are probably selling stocks buying then people are buying stocks because they are aware of the European crisis, and they don't want their stock to lose anymore of it's value. I did some research, and it seems that this is what happened in February 2009. People were skeptical of the global economic meltdown. Now, people are actually witnessing Europe's economic problems, so they are doing the same as before, and selling.
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