Stock market again in danger by Claudia Sonea

Since mid-August when the housing slump and the credit crunch, despite Fed's rate cut, stock market has passed through very troubled times. Now, again after big gains at the beginning of the session, traders had lost big time, especially in the technology area due to the news that Wall Street will lower its sales expectations for Baidu.com, the leading Chinese search engine that can search websites, audio files, and images. Also, the statement of ECB governing council member Axel Weber, that the rising inflation in the euro zone might impose a change in policy action, made traders restless because of the threat that European growth might slow and in the US inflation could prevent the Federal reserve to make another rate cut. However, many investors are betting on this reduction due to the announcement that the target federal funds rate was reduced with half a percentage point on 18 September as a response to the tightening credit. Kelmoore Strategy Funds portfolio manager Matt Kelmon revealed that Baidu.com lowered revenues was a hard hit to the stock market that was on the waves in the past few days. Furthermore all the stocks with gains are having great losses right now. Like always, Dow Jones is the first one hit and from a new trading high of 14,198.10 got to 14,015.12. The Standard & Poor's 500 index fell to 1,554.41 from 1,576.09, while the Nasdaq composite index lost 39.41 to 2,772.20. Gold and oil prices rose again intensifying investors' worries about the inflation. However, the weakening of dollar in front of the euro made exports more competitive abroad and despite the rising and dropping of the stock prices still there were significant rising like that of Dow Jones that gained more than it lost every time. Wal-Mart, one of the 30 stocks that make up the Dow industrials, increased the third year profit forecast even if sales rose less than it was expected, but still rose. Good news overseas stock markets are dealing with gains; stocks in Europe rose: Britain's FTSE 100 rose 1.38 percent, Germany's DAX index advanced 0.59 percent, and France's CAC-40 rose 0.42 percent and Japan's Nikkei stock average closed up 1.64 percent after a rating agency upgraded the country's debt. Don't go yet investing your money, you might be penniless at the end of the day.

related story: http://news.yahoo.com/s/ap/20071011/ap_on_bi_st_ma_re/wall_street;_ylt=AjYxlDWUhOGTta_9e7M7N.Ks0NUE

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

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Edited by Iveta Nagyova