Obama?s Speech Boosts Stock

Posted by Golden on September 10th, 2010

Stocks were boosted on Wednesday after president Obama?s billion recovery plan. Investors shifted their focus from worries about European banks to the recovery plan.

The DOW JONES industrial average rose 46 points or 0.45%, to 10,387. The S&P 500 gained 7 points or 0.6% to 1,099 and the NASDAQ composite climbed 20 points or 0.9% to 2,229. investor were worried that European banks are in worse shape than previously believed even as all the three major indexes fell more than 1%. On Wednesday some of that fear was relieved after the Portuguese debt auction was met with healthy demands. Experts warned that even though concerns about European banks may have eased but the problems will not disappear anytime soon. Various data continue to point to a slower economic growth globally even as austerity measures take effect in many European countries.

David Chalupink, head of equities at first American funds said that sovereign credit spreads have started again nearing the levels they were in the spring. It should be noted that under credit spreads are a sign that the funding of government debt may become more challenging for debt laden countries.

A report from the fed suggests that the consumer debt has failed by .6 billion in July which is far less than .25 billion decrease that was predicted by economists. Meanwhile President Obama officially unveiled three proposals that have the aim of bolstering an economy that has been shaky in a bid at recovery. This speech was made in Cleveland. A breakdown of the speech includes.

- 0 billion in tax breaks for businesses investing in new plant and equipment.

- billion for the improvement of roads over the next decade

- 0 billion extension of the business tax credit which will be used for research and development.

These proposals are not expected to be passed by congress anytime soon.

In the world markets, European shares gained. The CAC 40 in France rose 0.9%, Britain?s FTSE 100 edged up to 0.4%, the DAX in Germany rose to 0.8%.

The Asian market was much different as they ended sharply. Japan?s bench mark Nikkei index tumbled 2.2% while the Hang Seng in Hong Kong dropped 1.5%. The Shanghai composite ended 0.1% lower.