Archive for August, 2011

The Increase in the Stock Market

By jscreationzs

After the Market Tumbled After 3 Days of Rallying yesterday, we saw a great positive sign today. As we had all hoped, Federal Reserve Chairman Ben Bernanke made a positive announcement today saying that he predicts US Growth in the coming future. He said that the US Economy is on the right track for a long term economic growth and I hope he is right. It’s about time the US economy bounces back from the recession we have been seeing lately. Just this past month alone made the markets almost unbearable.

Bernanke hasn’t mentioned anything about any plans the Fed may take to boost further the US Economy. It may be because he believes that the economy does not need any more catalysts in the mix. If the economy grows in the future on it’s own, then that’s the best thing any investor can hope for. Bernanke admitted that the recovery has been slower than expected but he also said that it is happening and any growth is better than no growth at all.

As a result of the announcement, the stock market has been rallying so far. Currently the Dow Jones Industrial Average is up more than a 140 points and the NASDAQ Composite up more than 56 points already. The S&P 500 is up more than 17 points and the New York Stock Exchange (NYSE) up more than 92 points so far.

I think this announcement will keep the markets on a positive side for the rest of the day. The announcement has put hope back into the minds of investors after the sell offs that occurred yesterday after some worries of the announcement. I believe that the momentum will carry over to the markets next week and we will get ever so much closer to the 12,000 mark in the Dow Jones, a mark we haven’t seen all month.

Even though the stock market has been rallying today, the Price of gold has increased as well. Yesterday I reported that the price of gold was at $1,769 an ounce. So far today it has seen some gains. Currently gold is at $1,781, about $12 more than what it was yesterday. It seems as if the price of gold has almost stabilized around this point. It hasn’t been as Volatile  as it has been over the weeks prior to the market’s rallies of this week. If the markets keep rallying next week, I believe that gold will go down. It may not go down to the level it was at the beginning of this year that quickly, but it will go down. We expected gold to get past the $2,000 an ounce mark but the markets have kept it at bay. The $2,000 mark isn’t very impossible. All we”ll need is another incident in the global economy and I’m sure we’ll see gold sky rocket again.

But for now, the markets are doing very well, and gold price is steady. Certain stocks have been doing great as well. Apple Inc. (AAPL) has been going down for the past few days, but today, Apple stocks have risen more than 2%, or just over $8. It is a result of the Bernanke announcement as well as investors getting used to the fact that Steve Jobs is gone and Tim Cook is in charge.

There are still more than 3 hours left until the markets close for the day (unless you’re gold), so anything can happen. I believe we will stay in the “rally” zone and hopefully by the end of the day, we will see bigger gains.

Market Down Graph

By Idea go

Monday, Tuesday, and Wednesday, the stock market rallied gaining several hundred points. Today, the market took a tumble, but the good news is, we’re still above the 11,000 mark with the Dow Jones. The market will go up and down throughout the week so this drop isn’t a big surprise. The stock market rallied for 3 days in a row and a small drop is OK. Let’s just hope that the downward trend doesn’t continue over to the next few days of trading.

The Bernanke announcement is supposed to take place tomorrow. This is one of the few factors that influenced the market to go down today. It’s not a bad thing, it just means that investors are being cautious with their investments. If the news announced tomorrow is good, we can expect to see the stock market rally even higher tomorrow and the coming week. I still believe that the market is recovering, even though it has been very slow so far.

We’ll see what happens with the speech tomorrow and I will try to post an update on the speech when I can. But now, let’s get to the numbers of the stock market for today.

The Dow Jones Industrial Average fell more than 171 points finishing off at 11,149. We’re still past the 11,000 mark and I believe that we can stay here for some time.

The NASDAQ Composite also dropped almost 2% or 48 points finishing at 2,419. The S&P 500 fell 18 points or just over 1.5% finishing at 1,159. And the New York Stock Exchange (NYSE) fell 123 points finishing at 7,149 for the day.

Not everything fell. The banking sector saw gains after Warren Buffet announced earlier that he will be lending Bank of America (BAC) $5 billion (from Berkshire Hathaway). As a result, some banks saw significant increases. These small increases also kept the overall stock market from dropping even lower than it has so far today. Bank of America (BAC) gained more than 9% in value today finishing at $7.65 per share. Citigroup (C) also shared benefits with an increase of 4.85% with an extra rise so far in after hours trading putting the stock just a few cents short of the $30 mark.

As mentioned yesterday, Apple stocks dropped after Steve Jobs announced his retirement. As predicted, the downward momentum of Apple carried onto today and the stock fell another $2.46, finishing at $373.45. It’s not over for Apple. As investors become more familiar with Tim Cook, I believe that Apple will bounce back. In fact, a lot of investors are saying that Apple stocks are on the ‘bullish’ side, which is very good.

I’ve mentioned Universal Display Corporation (PANL) a few times this week as I have been keeping my eye on it. And as also predicted for this stock, it has been going up and up. Today it increased more than 15% finishing off at $46.73. It’s even closer to it’s 52 week high of over $63. I don’t own any shares of Universal Display Corporation, but I wish that I did have the money to invest while it was a little lower just at the beginning of this week. I believe that the momentum will continue as investors put more money into the company and stock value rises. Eventually it may balance out as investors try to sell the stock high after buying it low.

So what’s happening to the price of gold?

Gold prices have been dropping all week long due to the rallying the stock market has been doing. But today, it saw an increase. Earlier today, Gold price was actually down. Around the same time yesterday, I reported that the price of gold was down to $1,758 an ounce. Right now, the price of gold is at $1,769. It gained roughly $11 from yesterday. This shows that some investors have been using the decrease of value of gold over the past few days to put more money into this gold bubble because they believe the price will go up. They may not be wrong, and if they are right, they could be in for big profits.

If the announcement by Bernanke tomorrow is good and it gives the American public hope for a better future, then we can expect the price of Gold go to down even more, and the investors who invested at $1,758 may regret it. But if the opposite happens, they could be very happy investors.

 

Today wasn’t the best day of the week for the stock market. But we still have one more market day to go and hopefully the stock market pulls back. I am hopeful that what Bernanke has to say in tomorrow’s announcement is positive and let’s hope that it’s the case. I don’t think America can afford to go down in another recession.

This is a followup post of the article from earlier today titled “Market Falls as Reports Come in of Lower Home Prices.”

Earlier today, it seemed that the momentum from yesterday would not carry over, that the rallying of the stock market was over. But today, it showed us that the stock market isn’t done. After my last article here, the Dow Jones rallied and finished with a gain of almost a 144 points totaling to 11,320. It’s getting closer and closer to the 12,000 mark, a mark we haven’t seen for some time.

The NASDAQ Composite increased just under 22 points, finishing at 2,467. The S&P 500 finished with a gain of 15 points at 1,177. And the New York Stock Exchange finished at 7,273 with a gain of 63 points.

Steep Gold Price Drop

Gold Price Drop by Yahoo! Finance

While the stock market rallied, the price of gold kept on dropping. Currently the price of gold is roughly $1,758, dropping an additional $26 from our last report here on Stocksicity. To the left you see a graph that shows you just how steep the drop has been for gold. And if the stock market’s momentum carries on to tomorrow once again, we could see the price of Gold keep dropping as investors start putting their money in stocks rather than Gold. As always, some investors could use this as an opportunity to buy gold for a discount compared to earlier this week. If I had the money to purchase large sums of gold, I personally wouldn’t. I believe that this is a bubble and once the market gets better (and I believe it will soon enough), the price of Gold will keep dropping and eventually get to a level we haven’t seen for several years.

The banking sector did pretty well today. Citigroup (C) showed an increase of more than 4% which Bank of America Corporation (BAC) saw a rise of almost 11%. JP Morgan Chase (JPM) saw an increase of just over 3%.

Apple’s stock originally rose $2.58 during the trading day. However, after the market closed, it was announced that CEO Steve Jobs has resigned from his post at Apple. He left his post to Chief Operating Officer Tim Cook. As a result of the news, Apple stocks plummeted more than 5%, or almost $20 per share,  in after hours trading. The news should sink in over night and the value of Apple should go back up to balance itself out over the next few days. But this requires Tim Cook to make a good presence at Apple. He has to show everyone that he is the right person for the job. I have no doubt that he is the right person for the job. For Apple’s sake, let’s hope that he can fill the shoes of Steve Jobs.

I am glad the market turned around in the afternoon. I would have hated to see the stock market do so well earlier in the week just to go through a steep drop the next day. I also hope that the stock market’s momentum carries onto tomorrow and the stocks rally again. We are still hopeful for what Bernanke has to say in his announcement on Friday. If it’s a good one, I think we’ll be seeing more greens in the stock market next week as well.

Soon after the Stock Market opened today, it seemed as if the stocks will Rally once again for the second day in a row, and be in the green zone for the third day in a row. But over the past hour and a half, the Dow Jones have been steadily decreasing. Currently the Dow has dropped more than 38 points points after being up more than a 100 points just earlier. It almost reached 11,300 and for a moment, we expected it to surpass and keep going.

The NASDAQ Composite on the other hand, have lost more than 21 points already. The S&P 500 has dropped a little under 5 points. And the New York Stock Exchange has dropped more than 48 points.

NYSE Chart

Chart of NYSE for August 24, 2011 Provided by Scottrade

Of course, the stock market is a dynamic place. It will go up and down all day long. We can only hope that some of the momentum from yesterday carries over into later today and the stock market sees significant increases. It’s still early and anything can happen. People are still hopeful of the announcement Bernanke will be making on Friday. His announcement could very big way, whether it’s for better or for worse.

Earlier today, Moody’s Investors Service also downgraded the credit rating of Japan from Aa2 to Aa3. Standard & Poor’s and Fitch also downgraded Japan’s credit rating earlier to AA-.  The rating downgrade doesn’t seem to have a huge effect on the US Markets, positive or negative.

What seems to be affecting the stock market even more, and may be keeping the stock market from rallying for the second day in a row, is the report about the decline in Home Prices in the country once again. Bloomberg reported that prices on US Homes fell 5.9% in the second quarter this year compared to the same quarter of 2010. Foreclosure rates are still high and people are still losing their homes. This is and always will negatively affect the stocks. If the next quarter report comes in that prices on US Homes have risen, the stock market will rise with it.

Even though the stock market isn’t rallying like it did yesterday, the Price of Gold has still dropped. So far today, it has seen a big tumble of 74 points or 4%. It’s currently at $1,784 points and the gap between the current price and the previously expected $2,000 per ounce is even bigger. Just yesterday, gold set another record or more than $1,900 an ounce.

There is still almost 4 hours left until the markets close today. I think we will see more fluctuations in the market. We can only hope that the Dow Jones bounces back up and goes to the green. Gold may keep going down as investors may feel that the gold bubble is finally bursting and use the opportunity to cash out while the gold price is still high. The opposite can also happen. Since gold dropped almost a 150 points this week alone, investors may use the opportunity to purchase more gold in hopes that the price of Gold keeps going up. If the announcement on Friday doesn’t go very well, gold prices just as well may go up and keep going up. A good outlook on the announcement has provided a temporary relief over the past few days but if the stocks keep decreasing at the rate they have been today, all of that could be undone very quickly.

I’ll keep an eye on the stock market throughout the day in hopes that it comes back from the red and into the green. I also speculate that the price of gold will increase a bit as the day progresses because I believe investors will most definitely use this opportunity to buy Gold a a discounted price.

Today was a very good day for the overall Stock Market. Stock prices rallied all day staying in the green zone from the start. The Dow Jones, Nasdaq Composite, and the S&P 500 saw huge gains in their stocks, hopefully signaling a positive and brighter future.

Dow Jones Rallying Graph

Dow Jones Graph August 23,2011 - Yahoo! Finance

The Dow Jones Industrial Average gained more than 322 points, finishing at over 11,176 points. It saw an almost 3% gain and for the Dow, 3% gain is huge. The market day actually ended with the Dow Jones finishing at it’s day’s high.

The NASDAQ Composite gained more than 4.25% and finished at 2,446 points. Just like the Dow Jones, Nasdaq finished at its highest point of the day. The S&P 500 gained almost 3.5% finishing at 1,162 points for the day. And again, the S&P 500 finishes at its highest point of the day.

Stocks have gone up for the second day in a row, and it’s giving investors hope that what we’ve gone through over the past few weeks of constant losses is over.

So what caused the stocks to rally so much today and should we worry?

The Federal Reserve Chairman Ben Bernanke is supposed to make an announcement later this week. Most investors are hopeful that it will be good news which will result in the stock market rallying even more in the near future. He may announce a new plan to help the struggling US Economy come out of the turmoil we have been seeing over the past few weeks.

We are all hoping that the news is good, but no one is really sure what he will say. Almost everything is a speculation and so far it’s working out great for investors and the stock market. We may see a similar updraft for the next few days until the announcement by Bernanke. Assuming the news is good, the stock market should see an even more increase over the few days following the announcement. We may actually have a chance to reach the 12,000 mark at the Dow Jones soon.

The market was lowering right after the earthquake hit earlier today at around 1:55PM EST. It’s epicenter was around Virginia but it was felt all over the East Coast, including here in New York City. I was actually getting part of this post ready when the earthquake started to shake my room. Before the earthquake, I was seeing the Dow Jones slowly go up over the 200 point mark. After the earthquake, it tumbled just below an overall increase of 150. But I’m glad the quake didn’t affect the market in a negative way. I’m also glad that the stock market rallied and the Dow Jones went over an increase of 300 points despite the different fears that may have gone through the minds of the general public.

What was negatively affected today, was the price of Gold. It wasn’t because of the earthquake, but because the economy was looking better today. The price of Gold actually surpassed the $1,900 mark earlier today, setting yet another record. But the price of gold didn’t stay up there. Today it took a tumble and fell away from its record of $1,909. The price of gold went down more than 62 points, finishing just under $1,826 an ounce.

If the stock market keeps going up over the next few days, I believe that we will continue to see the price of gold drop which could be a sign that the gold bubble is slowly bursting. On the other hand, since the price of gold has dropped more than 3% today, investors of Gold may actually see this as an opportunity to invest more in gold due to the slight discount they’ll be getting compared to the price it was over the past few market days.

Whatever happens with the stock market, gold will still remain very expensive. It’s still over $400 more than what it was when the year started.

Yesterday I mentioned a stock called Universal Display Corporation (PANL) and I pointed out it’s huge gain. Today, it saw another huge gain and rose almost 17%. It’s past the $40 mark and closing in on it’s 52 week high of over $63. Rentrak Corporation (RENT) also rallied today by showing a gain of almost 24% increasing the gap between it’s current stock price and its 52 week low. A stock from the technology sector called GT Advanced Technology (GTAT) Inc also saw a huge gain of more than 13.5% finishing at $11.46 today.

The three above companies are just a few examples of why the stock market is doing so well. Huge increases in stocks like these have been having a big impact on how the stock market has been doing over the past few days. I don’t own any shares in any of the companies mentioned but I do hope that it keeps up because I always like seeing companies do well whether I’m making any money or not.

Well, today was a great day for the stock market. All sectors have seen gains and the overall market closed with a big win today. Let’s hope that the gains continue over to the next few days and let’s hope that the coming announcement is a great one because we really need a break when it comes to our economy.