Wall Street has once again been handed a reason to celebrate as small gains were made today, causing speculators to again about-turn on their views of the US economy. The Dow closed up, as did the S&P 500, putting an end to a 5 day losing streak. The Nasdaq’s performance over the week was mixed, it closed up as well yesterday.
October 1st is still being marked as America’s day of economic shutdown as the country rapidly runs out of money. This even though some positive signs are emerging from economic reports. The number of first-time claimants for unemployment benefits was show to drop to a nearly six-year low, and economic growth in the third quarter was shown to have remained pretty stable at around 2.5%. This inspite of a great deal of talk around the prospect of cuts in government spending and higher interest rates.
Pre-existing home sales have nevertheless dropped for the third month in a row, figures came in worse than the markets had anticipated.
JC Penney had done a u-turn and offered 84 million shares. The flagging retailer is attempting to raise as much as 1 billion dollars that it will need for the upcoming holiday season. JC Penney has denied these claims but nevertheless JC Penney stocks cascaded after the news reached the ears of speculators. They are also set to drop even further today.
JP Morgan top brass will be meeting with the president today. The recently punished bank is rumoured to have to cough up as much as 11 billion dollars in order to settle further claims that it contributed largely to the financial crisis.
A price fixing scandal in the automotive parts industry was also exposed. 9 suppliers based in Japan are in the cross-hairs and two executives of these first are said to have agreed to a guilty plea. 740 million dollars in fines are said to be on the table.
Trades of the day: JC Penney stocks are ripe for intraday PUT trades. Also short positions and PUT trades on EUR/USD are still looking attractive.