Monday was a good day for US stock markets, seeing gains for four days in a row for the Dow Jones. The gains were generally thanks to General Motors who benefited from an upgrade from ‘neutral’ to ‘outperform’ from Morgan Stanley. The Nasdaq also had a good Monday and both indices managed to close with a gain just short of 0.5%.
Tuesday cut short the Dow Jones run of gains with some serious profit taking from investors. By close of play the index was down 2.5% and the Nasdaq fared worse – down by almost 3%.
Wednesday saw favourable economic data released but it seemed that after yesterday, investors preferred to wait for the outcome of the two day policy meeting held by the Federal Reserve. The data showed that the US economy had grown by 0.2% in the fourth quarter, as opposed to an expected 1.1% fall back.
Thursday saw the Federal Reserve leave interest rates alone. This gave confidence to investors who now believe that the US economy has reached the bottom and will now start to come back. Analysts are not so sure, believing the earnings news due over the next three or four months will have a significant impact on possible downs in the market.
After two days of solid gains, Friday saw a red end to the week with the Dow Jones ending marginally lower. The Nasdaq fell harder and was down over 1%.