Asian trade: Asian stocks are trading in the red for the fourth consecutive day, as investors think the newly announced stimulus plan will do too little for the real economy. U.S. futures were dragged slightly lower tonight.
This is a big swing from a few weeks back, when the major indexes from around the world posted strong gains, helped by the government interventions. Compared with the last two stimulus bills announced by the U.S. government, the market reacted poorly to Mr. Obama’s stimulus program. In the past, equity markets rallied when the $600 rebate check program was announced, or even when Mr. Paulson unveiled its plan to save the financial system, even though, up to this day, its implementation is not clear. Except for vast news coverage, the last two stimulus programs did too little for the real economy.
Since the beginning of the year, Asian stock markets fell an average of 8%, extending the declines seen the year before. Similar to other parts of the world, the sell-offs in the equity markets struck investors confidence. As such, investors pulled huge amounts of capital from the equity markets and place them under the safety of treasuries or other types of bonds, leaving countries with a net outflow of capital.
Tonight, the Nikkei dropped 186.27 points (2.34%) to 7,759.67. The Australian S&P rose 47.00 points (1.35%) to 3,521.40.
Crude oil continues to move lower, as the global demand drops. Crude oil for March delivery fell $0.10 to $36.10.
Gold acted as a safe heaven in the last period. Bullion for immediate delivery rose $0.30 to $937.15.
Previous Wall Street trade: At the close of floor trading on the NYSE, the DOW was on 7939.53 after gaining 50.65 points (0.64%) while the S&P finished on 833.74, up 6.58 points (0.80%). The technology-heavy NASDAQ fared the worst in terms of its percentage gain, closing on 1530.50 after gaining 5.77 points (0.38%).