Markets Up on expectation of a Rate cut.

Posted by | October 30, 2007 | Current Affairs | No Comments

Stocks rose on Monday in anticipation of a Fed. Fund Rate cut on Wednesday. Analysts are expecting a rate cut by the U.S to save the economy which is experiencing low housing prices and tighter credit policy, this would also help the economy from lapsing into recession! The rate cut is expected to be by about quarter percentage point to 4.5%. The companies making most of the rising oil prices (when it touched the $93 price) are Exxon Mobil.

The Dow Industrial Average had increased to 63.56 points; Nasdaq went up by about 13.25 points. But many analysts feel that the Fed. might not cut the rates this Wednesday keeping in view the inflationary tendency. But given that the economy is quite fragile and the expectation high on the rate cut, the damage much be might more when the expected rate cut does not happen.

Meanwhile with the crude increasing to $93 per barrel and coming down by about 1% on Monday, made investors vary of buying oil shares at such a high price; but did make most of the increased prices and made money. Though rising oil prices are an issue of concern, some companies like that of Exxon Mobil did make profit; and according to sources the prices are sure to remain high!

That was the U.S. economy is a gist compiled from various reports from ‘Reuters’; not a very rosy picture. With the recession some time away and with expectations on the high one has to see if the Fed. goes with the expectation or not.

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