Wall Street ends week with more gains

This week shares on Wall Street made strong gains this week. The reason is the rescue of Citigroup by the US government. This action has strengthen the confidence on the market.At the end of the week, shares were growing less because investors want to know how large the financial crisis actually is. The indicator for knowing that is the shopping habits of people at the start of the holiday season.

Thanks to the rescue action of the US government to save Citigroup, all bank shares gained some extra profits. Citigroup itself rose again to 8.36 dollar. The government has taken over the toxic mortgage of Citigroup. That cost was about 300 billion dollar.

The Federal reserve is also responsible for the good results on Wall Street this week. They keep 800 billion dollar available to help people with getting a loan for a house, a company or for consumers.

Another positive signal was the announcement of President Obama that his team of economists will continue searching for new ways to end this financial crisis.

Because of these good results, some negative news in the economic sector was set aside.The orders for durable goods dropped down with 6.2%.Consumers spend this month one percent less than previous month, but the personal income rose with 0.3 percent.

Like I said in my previous blogs, confidence in the market is the most important fact in the financial crises. Without that companies can’t gain some new capital. I think a lot of people will look very carefully over their budget this holidays. That could have an negative impact on the stock markets.The government of the US did a good job with the help they gave to Citibank. But I ask myself the question were they get all that money. Government all over the world are helping their banks, but they should get their money from somewhere. I think that only helping the banks will not be enough to get out of this crises. Other industries are suffering to and they don’t receive any help.


source: http://www.ft.com/cms/s/0/858d7cf0-bd51-11dd-bba1-0000779fd18c.html