Economic Indicators and the Fed Chief’s Testimony Casting a Shadow (27-02-2008)

Investors on Wall Street on Tuesday decided to disregard the weak economic indicators released and to focus on the IBM share buyback instead. Markets rallied strongly and the Dow Jones closed higher by 114.70 points.

Asian markets also rose, with Hong Kong leading gains after the government announced tax cuts for both salaries and corporations. Other markets in the region also rallied as exporters gained and as energy related stocks advanced on the rising price of crude oil. Financial stocks were gaining on the strength of the advance in the U.S., with Mizuho Financial Group rising 3.3% and Mitsui Sumitomo Insurance Co. climbing 3.5%.

European markets however came under pressure on Wednesday, after results from British mortgage lender HBOS brought concern over funding for banks back to the forefront, while a rally in commodity prices boosted energy and mining shares. RBS, Barclays and BNP Paribas were among decline leaders. Also weighing on shares was the new record high of the euro against the dollar, which crossed over the 1.50 mark for the first time ever.

With readings for durable goods, new home sales and mortgage applications due out during today’s session and Fed Chief Ban Bernanke beginning his two day testimony before congress, U.S. market futures are pointing downward.

 Source: ISFM