Stock Market News

Oil, Fed Causes Rally

Steadily decreasing oil prices and positive signals from the Federal Reserve have caused a rally on the Dow Jones, rising at the fastest rate since April 10 of this year. Investors feel that with oil prices falling, and no interest rate hikes by the Fed in sight, the US recession is going to be a light one. The Dow Jones rose almost 3% to 11615.77 points. European stock indexes responded positively to the Dow Jones’ performance, with all major indexes rising.

Plunging oil prices and reassuring signals from the Federal Reserve combined to spur hopes that the worst could be over for stocks, driving the Dow Jones Industrial Average on Tuesday to its sharpest one-day gain since April 1.

This was hardly the first time since the bear market began in October that stocks have staged a strong rebound. Skeptical investors warned that this could be another false start: A potential recession is looming, the financial system is in disarray and housing prices continue to fall amid mounting foreclosures.

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Oil rebounds - stocks hurt

Wall Street took a beating on Wednesday after oil prices rebounded, and fears among investors about possible rate hikes by central bankers got bigger due to inflation worries. US consumers are now paying 4 USD per gallon, a record high for that country. Compared to Europeans they are still getting a good deal, however. The Dow Jones industrial average fell more than 1 percent to end at 12,165.84. European stocks did not fare better, with major stock exchanges closing on average 1.4% lower. The dollar dropped again in value, while gold prices rose.

Wall Street fell sharply Wednesday as oil prices rebounded, aggravating concerns that inflation may lead the world’s central banks to raise interest rates. The Dow Jones industrial average fell more than 160 points.

Investors have been uneasy about oil prices, which at times surged above $136 a barrel on the New York Mercantile Exchange after dropping a day earlier. Having breached $139 a barrel last week, record-high crude has increasingly posed both an inflationary risk and a threat to growth.

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