Fed is giving the chills by Claudia Sonea

This summer was terrible for the stock market that went through its worst period of ups and downs and plenty of instability. However, after August 16 when the Fed cut the discount rate situation has been improved and stock's prices were pushed higher and will continue to be pushed until the end of the year, according to Edward Yardeni, an economist who runs Yardeni Research in Great Neck, N.Y. Therefore Fed has a very influent role and that is why no one was surprised that after Federal Reserve Chairman Ben Bernanke's press release on Monday in New York, Wall Street had losses again. Investors were sobered up by the Bernanke who reinforced the concerns that summer's credit tightness might persist into the winter. Furthermore, Hugh Johnson, chief investment officer of Johnson Illington Advisors reveals that the combination between slumping housing market and higher oil prices is lethal. His declarations being supported by the fact that crude oil prices reached a record above $88 a barrel and the National Association of Home Builders' index that tracks developers' expectations of future home sales got to the lowest point since January 1985. As it is, more banks, like Wells Fargo & Co., KeyCorp, Midwest regional bank and U.S. Bancorp, give disappointing results, among which Citigroup Inc. reported a steep third-quarter profit decline and announced plans with other banks to create a fund that will help the credit markets. Like usual Dow Jones' stock prices fell 0.51 percent to 13,912.94, Standard & Poor's 500 index 0.66 percent, to 1,538.53, the Nasdaq composite index slide 0.58 percent to 2,763.91, also the Russell 2000 Index of smaller companies fell 6.01, or 0.72 percent. Still after Intel and Yahoo.com posted third-quarter results better-than-expected, the stocks gained in the after-market trading. So, Yahoo after falling $1.17 to $26.69 during the regular session, gained in the after-hours trading earnings of 11 cents a share- more than the 8 cents predicted by analysts; while Intel had a penny ahead of forecasts, closing at 31 cents a share. Due to the investors that sell stock for quick money, bonds prices have risen, but gold price has risen too and the dollar rose against other currencies. Inflation is another problem revealed by Bernanke on Monday. Not the core one- food and energy- which is mild, but the oil prices who reached record highs surpassing $88. However, financial and housing-related stocks fell and retailers fell too. What will happen next? Stay connected, because there are more exciting news to come.

related story: http://news.yahoo.com/s/ap/20071016/ap_on_bi_st_ma_re/wall_street;_ylt=AuevnQ3LCOnLtiAa1X7ZlyOs0NUE

by Claudia Sonea for PocketNews (http://pocketnews.tv)

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