Wednesday, January 21, 2009

US Stock Fails to Lift after Inauguration of Obama

Americans were expecting a ray of hope, some new plans, some new ways, at the inauguration of Obama, facing the great pressure created by recession. Large amount of people were hoping that Obama’s taking office could bring forward great changes to the nation’s economic condition. But did it really happened? The investors worried about the economic outlook, sending financial stocks down to their lowest level in 13 years. After Obama's incoming address to the nation at midday in Washington, shareholders and investors pushed the S&P 500 Financials Index down by 17 per cent to below its lowest closing level since March 1995.

The poor investors as soon as the inauguration function got over, they went back to unloading stocks. Financial companies led the market lower as investors worried about the state of the world's banks. Reality is not same as the people expected it to be. The broader S&P 500 Financial Index dropped almost by 5.3%, the US market which began with billions of losses by Bank Of America that forecasted its losses for 2008 could top US$41.3bn (€32bn). Citigroup’s stock fell by 20 per cent to close at $2.80, below its lowest level since receiving money from the government bailout in November.

On the other hand State Street received $2 billion of funding from the US Government last year as part of the Treasury’s bailout of America’s financial sector. The Dow Jones industrial average is down 332 points at 7,949 level. That's a decline of 4%. Broader indexes fell more than 5%. The Dow Jones industrial average plunged by around 4% with a slump of over 300 points to below 8000. Broader stock indicators also fell sharply. The Standard & Poor's 500 index fell 44.90, or 5.28%, to 805.22, and the Nasdaq composite index fell 88.47, or 5.78%, to 1,440.86.

1 comment:

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