Stock Market Looking a Bit Better

[dollardaze]

Stocks rallied on Friday, the Dow Jones Industrial Average gained 302 points up to 11,734, the S&P 500 Index rose 30 points to 1,296, and the Nasdaq Composite adding 58 points to 2,414. For the week, the Dow rose 3.6%, S&P went up 2.9%, and Nasdaq saw gains of 4.5%.

In the past week we saw the dollar rally, and oil sliding. If we get good news
on the economic front we may see more gains. Retail sales figures for July and crude oil inventories will be of special interest.

U.S. currency is beginning to show some small signs of stabilizing, after the credit crisis which began about a year ago. A continued advance has been seen in the euro, with expectations of the European Central Bank further hiking interest rates hoping to contain inflation. During the past week, though, currency markets had a chance to adjust after the European Central Bank left interest rates unchanged Thursday, and signs that Italy could be near recession.

One expert said that the dollar is in a better environment which will pressure oil along with slowing economies. The stronger U.S. currency affects dollar-denominated commodities, including oil and makes them more expensive for the holders of other currencies.
Concerns that growth globally will reduce oil demands let to a further slide in crude oil futures, which have been slumping since mid-July. A stronger dollar also boosts appeal of U.S. assets such as stocks and bonds.