to $825 billion, where his department will take the second half of the TARP fund.
Optimism diffused in markets as hopes are all hung on the new President and his committee, Dow Jones Industrial Average pared some of the losses that were seen earlier in the year where the index rose 3.51% or 279.01 points reaching 8228.10 levels, the S&P 500 added 4.35% or 35.02 points reaching 840.24 levels, also NASDAQ inclined 4.60% or 66.21 points reaching 1507.07 levels.
The diffused optimism was not only a result to what markets projects about the new fiscal plan, but the move of executives where they decided to purchase some of their companies shares had cleared that those executives are confident of a recovery to happen for their companies, the Bank of America executives where the first contributors to this move.
Even with the gloomy outlook still at hand, earlier today China released out their GDP reading, the yearly real GDP plunged from the previous 9.0% in the third quarter to seal the prior year with 6.8% expansion the lowest since seven years. The economic slowdown which was a triggered by the prolonged Credit Crisis which materialized on the world's economies had resulted in this degradation, China which is known to be one of the main competitors with its industry faced weak exports as the world no longer demand goods as much as they used to.
Industrial Production eased in December, the year to date reading slipped to a rise of 12.9% from the previous 13.7%, where now the manufacturing sector stalled; moreover, the long lost confidence and the continuous deterioration in the economy had crippled the retail sales, where the December reading eased to 19.0% from the previous 20.8%.
The falling demand across the globe will continue to weaken the production of the manufacturing sector resulting to weaker demand on Crude oil; China, Japan and South Korea are three main Asian economies who demand crude in huge amounts and based to their weakening growth markets we expect to see black gold prices ease deeply.
Since March contract opened crude prices inclined to a record high of $44.16 per barrel but easing to currently trade at $43.65 per barrel, those low levels and the continuous economic slowdown will push OPEC to consider a third production cut just to prevent more losses, especially in the prior year OPEC members enjoyed the unprecedented crude prices.
Moving to the neighboring economy, Bank of Japan decided earlier today to hold their benchmark rates at 0.10% coming inline with markets projections; BoJ can't reduce their rates down to more than the current levels because even when they are fighting any projections of deflation their rates are considered too low to maneuver.
The inclining Japanese yen will continue to weigh upon the Japanese exports and growth levels, where as we have seen recently the levels of exports were curbed heavily; yesterday the Japanese yen traded near thirteen-years high reaching 87.09 levels, but it retreated back to currently trade at 89.26 levels. Also the strength was seen against the Euro and the British pound where investors tend to dispose the higher yielding assets due to the continuous down turn in their economies and the expectations of deeper rate cuts.
But eyes will continue to be toward the world leading economy, where they would be releasing some fundamentals about their housing sector. Markets projections clears out that the Housing starts in December eased to 605 thousand from the previous 625 thousand, alongside Building Permits where the median estimate stands at 600 thousand from the previous 616 thousand.
The housing sector in the United States will continue to weaken as worldwide demand continues to ease alongside the long lost confidence which would continue to weigh on various sectors in the economy.