« Previous | Main

Wall Street Ends Week Strong

May 08, 2009 6:23 PM

ABC News’ Jessica Golden and Jerika Richardson report: It was a busy morning on the trading floor as investors digested the results of the bank stress tests and the jobs report. 

The latest jobs report gave a mixed picture of employment in the U.S., as the pace of layoffs slowed in April, when employers cut 539,000 jobs -- the fewest in six months.  But the unemployment rate climbed to 8.9 percent, the highest since late 1983, as many businesses remained wary of hiring during uncertain economic times.

How are investors reacting to today’s data?  David Henderson, with investor relations for Dru Stock, said they are responding enthusiastically. 

“All of the news [developments] coming out over the past two months have been a mixture of halfway decent earnings reports, halfway decent economic reports,” he said. “Everything is being interpreted in a very positive fashion.”

Henderson added that investors were expecting the jobs number to be far worse than it is, and he credits Washington for instilling confidence in investors and stepping up to the plate to put new, fresh money into the market. 

Have we seen the worst of it?  Investors fear that we will most likely see unemployment rise into the double digits in the coming months.   

“It’s just a matter of how quickly the jobs shift between private and public sector,” said Jason Weisberg, senior vice president of Seaport Securities. 

Weisberg and Henderson both said that the jobs number has been inflated by the government, which has hired a lot of people recently as part of Obama’s stimulus package.

Did the stress test results overshadow today’s jobs report? 

Henderson says, “The market is looking forward and I don’t think either had a big impact. We’ve seen the stress test and it’s expectation of results of the index in the market for the past couple of weeks.  Wall Street expected what we got yesterday [Thursday].” 

He said banks are raising money through stock offerings rather than more government support -- a big signal, he said, that financial institutions don’t want the government’s help anymore  and certainly don’t want the government’s control, which bodes well for both taxpayers and investors.

Signs of a potential economic recovery have helped increase oil prices by around 70 percent from February lows below $34 a barrel.   

The Dow finished the day up 164 points to 8,574 as we head into the weekend.

May 8, 2009 | Permalink | User Comments (0)

User Comments

Post a comment

Name:

Email Address:

URL:

Remember personal info?

Comments: