Posted by & filed under Part 1 Business in a Global Environment.

U.S. stocks rose for a fourth week, pushing the Standard & Poor’s 500 Index above 1,000 for the first time since November, as better-than-estimated employment, manufacturing and home sales data boosted confidence that the worst slump since the Great Depression is ending.

Source: Bloomberg.com

Date: 8/08/2009

Keys: Stock market, economy, finance, investing, business cycle

Link: http://www.bloomberg.com/apps/news?pid=20601103&sid=agU0z5koJRvU

Questions for discussion:

  • Stock market performance is a leading economic indicator since investors buy stocks in anticipation of improving future business profitability. On the other hand, employment levels tend to be lagging indicators. Given the information provided in the article, why do you think investors are pushing up prices on the stock market?
  • Do you believe the economic stimulus programs from government, such as the cash for clunkers program, can be stopped at some time in the future without dramatically affecting car sales? Explain your thinking.

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