Before the whole world celebrated Christmas day, stocks were up last December 23, increasing the Standard & Poor’s (S. & P.) 500-stock index.
Investors were greatly pleased by the news announced by the U.S. Congress, approving the extension of unemployment benefits and the holiday payroll tax for workers. As both programs will be concluded at the end of the year, economists forecasted that there would be an estimated decline of 0.1 percent in economic growth.
The day of the Christmas Eve was recorded to be the slowest full day trading ever since the year started. It was reported that on December 24, traders were only able to exchange $2.22 billion shares, only almost half of the average shares during regular days. The market was closed on Monday, as the Christmas Day fell on a Sunday.
According to reports, the continuous rise of stocks started last December 20. This is still due to the positive economic reports saying that the U.S. economy has been improving since the beginning of the last quarter of the year. One of the favorable economic reports that cheered investors was the drop of unemployment rate, the lowest since 2008.
Amid various economic reports that were released last December 23, the optimism among investors continued. The S.& P. climbed higher by 0.9 percent to 1,265.33, far higher than 1,265.33, when the year began.
The Dow Jones industrial average increased by 1.02 percent at 12,294 while the NASDAQ composite index attained an increase of 0.74 percent to 2,618.64.
The Dow also surged up by 4.5 percent in the last four days. This was Dow’s first increase in four consecutive days since September. Dow’s larger earner so far is the Bank of America, which rose by almost 2.4 percent. The two remaining stocks of Dow namely, Alcoa and Boeing also had an increase.
Todd Salamone, research director at Schaeffer’s Investment Research, predicted that the stocks may continue to grow as the upcoming year opens if and only if the S.& P. 500 could surpass “a couple of crucial technical thresholds.”
Last December 23, the government announced that the consumer spending of the people grew slower than what was expected. Another alarming economic sign was the fall of business investments in two consecutive months. This decline of investments may continue as a tax break that supposed to entice companies to invest in new equipment and facilities is set to expire at the end of 2011.
However, despite these negative economic reports that may impact the economy soon, traders and investors are still optimistic on the condition of the economy because of the positive reports on the job market and high sales of retailers due to holiday spending.