Tag Archive: bernanke

AT&T and T-Mobile Merger Stopped

By digitalart

AT&T’s plan for Global Domination has been stopped by the Justice Department earlier today. Global Domination may be over exaggerating but the merger with T-Mobile would make AT&T the largest cell phone service provider in the United States. AT&T is currently the number 2 provider while T-Mobile stands in at Number 4. The deal has been discussed for some time now and it has had a lot of opposition from rival companies to individuals who wouldn’t want to see another oligopoly set up because it would spike up prices for all of our wireless bills.

I am glad the Justice Department blocked the merger. It would have meant far less competition and it could have turned out to be a huge burden on the consumers. T-Mobile was looking forward to the merger because they have struggled at the number 4 position, behind Sprint at Number 3 and Verizon at Number 1. However, AT&T promised T-Mobile $3 billion in case the deal fell through. Hopefully AT&T keeps their word and pays T-Mobile so that T-Mobile can keep competing with the big names.

AT&T may also challenge the actions of the Justice Department in court in hopes that a Judge would reverse the decision and allow them to go forward with the merger. I hope that they don’t proceed with the case and even if they do, I hope whatever Judge they get deny their request. Giving AT&T more power is a bad idea. They have tried to set up a monopoly years ago but it was stopped and this deal needs to be thrown out.

After the news came in of the merger blog, AT&T (T) stocks fell 4.5% to $28.30 a share. Sprint (S) stocks on the other hand, increased 8% to $3.84 per share. And Clearwire Corporation (CLWR) also grew 7% and is now at $3.08. AT&T Stocks will most likely stay in the red for the rest of the day because of the bad news. But just like Apple (AAPL), AT&T is a big enough company to bounce back just as quickly. I will follow the news of AT&T and T-Mobile as they come in over the next few days, let’s hope it’s good news. If anything, some of the big companies need to be split up into smaller companies to increase competition. It would be great for the consumers if they have more than a few choices for their wireless plans because it would drive prices down greatly.

But it’s unlikely that these companies will be split up every more. We’ll have to look at the rest of the stock market world for hopes to making and saving money.

So what’s going on with the stock market besides the blockage of AT&T and T-Mobile?

As predicted over the past few days, the momentum of the stock market has kept up. So far today, the Dow Jones Industrial Average increased another 92 points and is currently standing at 11,652. The NASDAQ Composite so far grew more than 13 points and is at 2,589. The S&P 500 grew more than 11 points and the NYSE grew more than 96 points so far.

The day isn’t over yet, anything can happen. But I believe the stock market will stay in the green mainly because consumers and investors are hoping for a new Federal Stimulus in the near future. Even though the economy is slowly growing, it’s still weak. Many investors are hoping for the stimulus from the Federal Reserve even though Fed Chairman Ben Bernanke didn’t signal or indicate that there will be another stimulus coming our way.

Either way, the stock markets seem to be benefiting for now. I don’t know if the Stimulus will actually help the economy in the long run. The government has to get the money somewhere and just printing money without backing by resources would just lower the value and end up having a negative effect and could cause inflation to rise faster. I know some are saying that the government already has the money and that it will most definitely help, but I guess I will be convinced when I see it.

Until more news comes out, I believe it will keep going up and the Dow Jones will get closer to the magic 12,000 mark that we haven’t seen for a while. The market will most likely stay in the green for the rest of the day and hopefully the rest of the week.

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.