|
Mergers and acquisitions can be a good sign for the stock market. When a company such as Alcoa Inc. makes a $27 billion bid for their Canadian rival Alcan Inc. it means they have great faith in the economy. In other words, they are willing to incur heavy debt because they believe the market will product enough profit to pay back that debt in a reasonable amount of time. Not all economists are as confident as the businesses are. There is little economic data to indicate that an upswing is likely to happen anytime soon in the market. Most businesses are waiting for the federal government to release the new interest rates. Tech stocks are still suffering under the slow growth of the nation. Consumer credit has contributed to the strong stock market showing due to the extra capital in the market place. Credit and other types of loans grew 6.7% in March which is the strongest increase in 4 months. When credit is extended the majority of people spend this money in the market without much concern of investment or savings. The Dow Industrials rose somewhere around 48 points to 13,313 points which is record setting. More importantly the S&P 500 also rose to 1,500 points which is at the highest level for the first time in seven years. The longest blue chip gain in stocks was experienced since 1972 which is another sign of an improving market. It appears as markets related to the war, oil and hard manufactured goods increase others declined sharply. The recent rise might be more of a fluke than something that is likely to be sustainable in the future. The market also shows great volatility which may make some investors worried and other bolder in their investing approaches. Almost no economists have yet explained why the rise is happening in a softened economy. Average investors should maintain their stocks in long-term growth opportunities and avoid the hype associated with the fluctuating stock market. Without access to day trading software and the heavy fees associated with multiple transactions there may be more damage than good by switching stocks constantly. If the growth continues choose stocks that are likely to grow as a residual to the main market in order to realize the highest gain. Murad Ali, a two-time published author, writes articles and offers advertisement space for businesses. Visit http://www.thenewbusinessworld.blogspot.com
Related Articles -
Investing, stock market, increase in stocks, S&P 500, Dow,
| 
