How do you explain the surge of Stock prices today?

Question

Just want to know your thoughts...

Answer 1

Three parts.

1. Retail reports were better than expected
(but expectations were very, very, low)

2. Major deals in mergers and acquitions are still going, which is good for the market.

3. Short squeeze. There were so many shorting the market, that when the market moved up quickly all those shorting the market were forced to go out and buy to cover. This further propelled the market up.

Answer 2

The stocks surged based on retail showing an increase in their projected sales. If people are buying more than expected there is more product in demand therefore companies are producing more consumer goods causing people to invest more in those companies. If sales are down people do not want to invest in companies that are not producing make sense???

Answer 3

There were some positive indicators, and news of a major merger.

At this time of the year, the market can react strongly to small amounts of news. Two days ago it swung quickly in the other direction on rumors and worries about subprime defaulters.

One day, or even one week, in the markets is not a strong indicator of anything - though it's always a nice feeling when it's going up!

Answer 4

People have confidence in the economy. The Bush tax cuts have actually generated higher tax revenues and the budget is closer to balance that before. With the tax cuts, people had more money and many spent that money which meant that a lot of people made more money than before. That increase in income increased the tax revenues. Lowering the tax rate actually increased the total tax income and increased people's confidence in the future. Isn't that amazing?

Answer 5

From what I understand it was based on strong sales reports, driven by consumer spending and company aquisitions.