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“Markets Fall on Doubts Rescues Will Succeed” Report

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Updated: Oct 1st, 2021

The article entitled Markets “Markets Fall on Doubts Rescues Will Succeed” published in the Wall Street Journal outlines the fall of global stock markets, attributing the plunge to doubts on the feasibility of the then proposed $700 billion financial system bailout plan by the US Federal Government.

Nuances on volatilities of stock markets presented in the Wall Street Journal (WSJ) referred to above relate to the pervading stock market ironies with investors torn in the dilemmas regards the wisdom of selling or buying or whether to invest in stocks or in bonds. The doubts in the interim stock markets in the US and in the world over culminate from the failure by global leaders to restore confidence in financial markets through their capital injection rescue schemes. The crisis in the financial has become a cyclic crisis protracted by the fear of lending and investing by market players. This has also been exacerbated the voluminous sale of stocks in huge proportions.

The Dow on Wall Street plunged to 161.52, or 1.47 percent, to 10,854.17 after surging more than 125 points in the earlier than dropping by over 180. With Monday’s 370-point recession worsened by the doubts over the feasibility of the rescue package by the Federal Government were down 534 points, or 4.69 percent for the week. Broader stock indices also dropped in the interim. Standard & Poor’s 500 indexes plunged to 18.87, or 1.56 percent, to 1,188.22, while the Nasdaq composite index fell 25.65, or 1.18 percent, to 2,153.33.

From another dimension, investors were keeping an eye on the oil prices with the contrasting anticipation of government rescue scheme as well as significant short covering driving crude to the biggest one-day gain. Investors also watching oil prices after anxiety over the government bailout and a huge short-covering rally pushed crude to the biggest one-day gain.

The pervading atmosphere in the financial and stock markets is marked gloom illumined by poor stock market performances following failure by concerted efforts by the US Federal government and other global leaders to restore confidence through capital injection schemes in the stock markets still smarting from the blow of the collapse of the U.S securities firm Lehman Brothers, an incident which seemed to be just a tip of an iceberg.

The article “Dow Takes Giant Leap as Bailouts Snap Gloom” presents an outline of the dramatic and phenomenal rise of the Dow Jones Industrial average. The article captures the ecstasy of investors following the preceding week’s glum triggered by dismal stock market performances after revived stock trading trends sparked by bailout prospects.

The Dow Jones Industrial Average shows that the firm’s shares shot through 936.42 points to 9387.61, becoming the largest one-day point gain ever. The record was remarkable, coming after eight successive days of trading losses in the financial markets, the article states. The short-lived positive atmosphere in the stock markets on Wall Street revived by the meteoric rise of the Dow Jones points to the unprecedented 11% since 1993.

The rise in Dow indices and those of other key financial market players can be premised in the pervading global financial and stock market performance plummet, which saw the 18% plunge of the Dow Jones Industrial Average in the preceding week, which was the worst of cases for Dow Jones in its 112-year trading history. Broad financial market analysis following the interim surge of Dow Jones indices entails that big winners in the stocks trade are those trading in the stock closely tied to economic growth, which is widely viewed as an indication that the feared recession is largely regarded to be relatively short term by the investors. The pro tem was marked by lucrative pictures on the stocks revivals of various stock trade categories enlisting Energy companies, Industrial commodities, Mining companies, etc.

The third article, “Home Re-sales Increase 1.4%, Buoyed by Bargain Hunters,” presents the gloom in the US housing markets as the mortgage crisis deepens.

The article constitutes an outline of the trends in the development or rather deteriorations of the mortgage crisis in the US dating from 2005.

Extensive mortgage crisis analyses have presented figures on the crisis surge detailing that the sales of previously occupied houses increased from 1.4% from the previous year as financial institutions reduced prices on foreclosed properties.

The housing crisis in the US must be contextualized within the broader precincts of the far-reaching economic malaise largely impacted by the near-collapse of the global financial and stock markets. The causative and aggravation dimensions of the mortgage crisis include the detailing that financial players like Freddie Mac’s costs of borrowing have increased owing to protracted shunning of the company’s bonds and notes by foreign investors.

The current economic crisis in the US, together with global stock and financial markets under performances are intertwined dynamics that are entrenched than simplistic as they were. Many economic analyses have been misguided in their attempt to break down and unravel the cobweb of factors leading to the build-up of the economic and housing crisis held as most phenomenal after the Great Depression in 1970.

Several analysts have attributed the collapse of the global financial system to the destabilization of the mortgage and housing crisis.

Justin Lahart (2007) notes, “A salient provenance of the Housing crisis which is inalienable from the economic crisis enlists in its core the lack of feasible and clairvoyant regulatory framework for the moderation and stabilization as well as sustenance of the financial institutions in the US.” The ramifications and ripple effects of the US economic crisis have swept across global landscapes owing to the long criticized financial system devised after the World wars in which the US economy is the heartbeat of the global economic paradigm leaving the entire world susceptible to upheavals rocking US financial and stock markets and economy at large.

References

Justin Lahart (2007). “Egg Cracks Differ In Housing, Finance Shells”, WSJ.com, Wall Street Journal.

Jeannine Aversa (2008). “Rebate Checks in the Mail by Spring”, The Huffington Post, Arianna Huffington.

Wall Street Journal. 2008, p.1.

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IvyPanda. (2021, October 1). "Markets Fall on Doubts Rescues Will Succeed". https://ivypanda.com/essays/markets-fall-on-doubts-rescues-will-succeed/

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IvyPanda. (2021, October 1). "Markets Fall on Doubts Rescues Will Succeed". Retrieved from https://ivypanda.com/essays/markets-fall-on-doubts-rescues-will-succeed/

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"Markets Fall on Doubts Rescues Will Succeed." IvyPanda, 1 Oct. 2021, ivypanda.com/essays/markets-fall-on-doubts-rescues-will-succeed/.

1. IvyPanda. "Markets Fall on Doubts Rescues Will Succeed." October 1, 2021. https://ivypanda.com/essays/markets-fall-on-doubts-rescues-will-succeed/.


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IvyPanda. "Markets Fall on Doubts Rescues Will Succeed." October 1, 2021. https://ivypanda.com/essays/markets-fall-on-doubts-rescues-will-succeed/.

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IvyPanda. 2021. "Markets Fall on Doubts Rescues Will Succeed." October 1, 2021. https://ivypanda.com/essays/markets-fall-on-doubts-rescues-will-succeed/.

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IvyPanda. (2021) '"Markets Fall on Doubts Rescues Will Succeed"'. 1 October.

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