Poor Economy Reports Leave Stocks Flat – March 2010

While it seems like the economy wants to recover and the stock market wants to go up, recent economic reports show that the economy still has a bit of a distance to go before it recovers, and that has left stocks relatively flat over the past week.

Stock Market Index Are Moving Up

Stocks this past week gained and lost and sat relatively flat for the last day of trading thanks to some new economic reports released this past week. While the S&P 500 finished at a 17-month high, the Dow Jones was only able to gain nine points on Friday after afternoon trading. This was a drop from the start of the day when stocks on the Dow Jones jumped up thanks to reports that retail sales in February had increased by .3 percent. This was good news for investors as many economists thought that sales were going to drop, not increase.

Inventories remain unchanged per Commerce Department

However, when the Commerce department released a report that said inventories are unchanged, stocks fell. The reason for this is many economists thought that there would be an increase, and with no increase it has raised some more doubts on the economy from investors.

One week ago, the Labor Department announced that few jobs were cut in February than originally had been estimated, and that made many economists happy. They saw it as a sign of the market improving, but this past week has dulled the luster of the jobless good news slightly.

Stock Market will continue to rise

Most likely the stock market will continue to rise slowly until investors are able to make a better guess about how the job market is going to do. Over the past few weeks, there has been a noted skepticism from investors on the strength of the market and the economy, and that is preventing the market from making big gains.

In addition to the flatness of the market during the last part of this week, crude oil prices also fell by $1.06 to $81.05. As well, the dollar and the price of gold both fell.

What will this next week hold? Well, it is actually going to be a very important week for investors as the Federal Reserve’s interest rate committee is meeting on Tuesday and there may be a change in the interest rate, or it may be left at its record low value. Depending on which way the interest rate goes, it could have a big impact on how confident investors are in the market.

Investors want to see the market improve, and while it is improving, it is doing so at a very slow rate. A few points here, a few points there, is all that has been seen on the market for the past few weeks. Many investors are losing confidence in the market as a result and that is doing nothing to help it. As for how the market will do in the coming weeks, it depends greatly on how the government responds to the flatness of the market.

Further Readings

Is second recession dip coming?

Future of US Economy