Wall Street Surges Again on Falling Energy Prices

Market awakes – as energy price

As early as he could a Trader Tom Gherkins lifts his mobile and ipod to look at the trading activities at NYSE and found most of the stocks rose considerably on July 17, 2008. On Thursday stocks rose as to better the investors expectations. JP Morgan Chase and Co., Quarterly reports and United Technologies Corp reports gave investors stronger than expected to provide reassurance about the status of economy.

Wall Street shot higher on Thursday for the investors to glee. The rally extended into a second session as weak energy prices shot in and this resulted in unexpected positive quarterly reports from the big companies. JP Morgan Chase and United Technologies released their quarterly reports to press with the stronger than expected results. Needless to say the Dow Jones industrial average also rose to a considerable level approximately 200 points by advancing to more than 480.

Expectations of investors got shot in hand with a double dose of exciting news after weeks of lull transactions at the trading reflecting the economy of US. Oil barrel dropped about $15 per barrel and sweet crude fell to $129.29 from $134.60 a margin of $5.31 per barrel. Oil has dropped for the past three sessions. The three Major Dow industrials - JP Morgan Chase, Co, Coca-Cola Co and United Technologies Corp together made statement indicating holding up their business despite difficult economic conditions.

The cheering reports of these companies have reposed confidence among the investors, financial institutions and trading groups and this trend allowed them to set aside their worst fears about the future economy. Wall Street also had some positive periods in the past few months brewing optimism just to fall back into a downturn as pessimisms about the economy and financial sector have well backed up.

Impact due to oil price raise

Kevin Dorwin, principal at wealth management firm pointed out that "The sentiment has just been so negative that even a whiff of positive news is driving the markets,” also Osborn and Scarborough in San Francisco opined that “ Oil the key factor right now because inflation has been on the top of the investors’ minds” the weakening of oil prices indicates that inflation is surely not out of hand and that is why it is positive for both the stock and trading markets”

Energy Department declared that stockpiles rose last week due to fall in natural gas prices after oil signaling a drop in demand. Natural gas fell 86.1 cents to settle at $10.537 per cubic feet while levels remain below those of recent years.

For sometime now US economy was in jittery and this sustained drop in energy costs was a good news for all parts of the economy as Wall street was worried that they will remove their spending on discretionary items to make room in their budgets for the higher priced commodity. As consumer spending accounts for more than two-thirds of US economy a pullback could have been worrisome. The entire world now looks for further slide in Oil price for their economic stability including US economy.