Wall Street Holds Steady after Huge Gains

October 29, 2008 11:17:28 AM PDT
Wall street is taking a breather today after Tuesday's dizzying gains.One trader compared the bargain stocks available on Wall Street to a 45 percent off sale at Macy's. But at the opening bell on Wednesday, the big board revealed more selling. "To a certain extent you can't sell forever. We've had an indiscriminate sale on stocks," said Chief Investment Officer for Jefferies, Art Hogan.

Tuesday's rally came on the heels of bad news for the overall economy with whirlpool announcing it will cut 5,000 jobs next year. Another report showing consumer confidence still near all-time lows and another record drop in home prices. "S&P forecasts that home prices won't stop declining until the first half 2009 so our expectation is that while the peak to trough decline right now is about 20 percent, we could see it fall by about as much as 30 percent," said Sam Stovall, Chief Economist with Standard and Poor's.

Most Asian and European markets enjoyed double-digit percentage gains following the Dow's nearly 900 point jump.

Many investors attribute yesterday's rally to banks beginning to lend again. But it was also in anticipation of The Federal Reserve potentially reducing interest rates to 1 percent Wednesday; the lowest since 2004.

European and Japanese governments may be following suit with their own cuts. "You have a rate cut coming and you have Europe off the ground. That gives us a real solid push," said Patrick Casey, a trader with W.J. Blum & Sons.

Orders to U.S. factories for big-ticket manufactured goods posted their largest gain in three months. Economists see this as a good indicator of the overall health of the industrial sector

While oil jumped four dollars a barrel Wednesday, there is good news for General Motors, the government may be lending them $5 billion dollars.



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