In the present volatile market, recent wide value swings are attributed to things like oil prices, the value of the dollar against other currencies, and, recently, the home loan influence on Financials. The question is, which is the primary influence, or is it something completely else?
2007-11-28 07:33:47 · 6 answers · asked by boz_hobbs 2 in Business & Finance ➔ Investing
Greed and Fear.
2007-11-28 19:31:22 · answer #1 · answered by Anonymous · 1⤊ 0⤋
The primary influence is how earnings are reported for various sectors. Currently everyone is on pins and needles with the financial companies and that's a huge driver of investor attitude. Since financial companies are suffering, any company with debt or the need for debt (heavy or light) could suffer during this market trend. Companies light on debt and heavy on cash don't need to borrow to survive. These will be the ones who will emerge relatively unscathed and their stock prices will remain level or even gain.
Once something or someone intervenes to help out the financials, we'll see an uptrend. Until then, invest in companies that have products that are used no matter what.
Ron, ChFC
2007-11-28 07:57:22 · answer #2 · answered by Anonymous · 0⤊ 1⤋
Noise.
Daily movement is not "caused" by anything or anything things in particular. The human need for "the reason" or a plausible explanation propels the general and financial press to offer up a million explanations every day. However, no one has yet been able to prove any particular cause or causes for any major single movement in the past -- what you get is explanations (Go ahead -- look it up -- I'll wait....Didn't find any studies backed by hard numbers from reliable sources, did you?).
Explanations are reasonable stories that usually move backward through time gathering momentum based upon what feels logical.
Nothing moves the market on a daily basis.
Very Zen.
2007-11-28 09:49:55 · answer #3 · answered by Anonymous · 0⤊ 1⤋
Like a previous answer said, supply and demand. The markets are driven by the people themselves. In the short term, stocks are all about speculation. In the long term, its all about earnings. The stock market is driven by people's optimism and fears. Stocks go down from fear and up from optimism. ex. Walmart says next quarter that they expect to earn $.70 a share. If they earn $.70 or higher, people will buy more shares. If they come up short, say they earn $.60 a share, people will question the management and earnings of Walmart and will sell their shares based on fear.
2007-11-28 08:10:52 · answer #4 · answered by Anonymous · 1⤊ 1⤋
Just like everything else, Supply & Demand. If more shares are available for sale the price declines, the more shares investors wish to purchase the more the price will go up.
The other factors just affect the S&D curve.
2007-11-28 07:51:02 · answer #5 · answered by tiescore 6 · 1⤊ 1⤋
NEWS, good or bad.
2007-11-28 13:51:16 · answer #6 · answered by Barney 6 · 0⤊ 1⤋