Trading Floor3 - New York Stock Exchange

New York – On Thursday morning, stocks in U.S. rose as China expressed confidence in Europe while not planning to sell any of the European debts it has in its hold. This confidence in Europe denied many economical reports of the U.S like the one that had forecasted that the U.S economy did not see much growth in the Q1 on the gross domestic product.

This came soon on Thursday, after an agency in China that manages its foreign reserves estimating to about $2.5 trillion, denied a Financial Times report that assumed that China would cut of its exposure to the European debt. It was only soon after this that major indexes around the globe started to rise.

Infact, the issue of debt problems in Europe has made the major stocks in the world pound this month, and the traders were already worried taking the way the economy has hit the banking sector as well, as there were apprehensions that the financial crisis in the countries like Greece, Spain or Portugal would also hit the banking sector terribly. And since there has been the finalization of the amount of $1 trillion for the European Union rescue plan, there are more speculations that the budget cuts in the European countries would slow down the global recovery.

But, since China has expressed its support to Europe, the Dow Jones industrial average was up by 150 points in the morning trading, and the Treasury prices also looked steeply dropped as there was heavy trading in the morning. The Euro being the standard indicator of the European economy rose to $1.2230, where as about 2,700 shares rose in the NYSE (New York Stock Exchange) with a fall of only 100 shares. The volume was calculated to be around 131 million shares as against 172 million shares traded last Wednesday.

The prices of bonds also fell after traders vouched for bigger assets like stocks, and the initial claims for the unemployment benefits also fell to a relatively adjusted total of 460,000 last week. Hence, high unemployment is still the matter of concern for the U.S economy as the rate of unemployment rose to about 9.9% in April. And according to economists, the annual growth needs to climb to around 5% to cut down the unemployment rate by 1 percentage point.

Though stocks have been considerably rising but economists say that graph is unpredictable, and in countries like Britain the stock average at Britain’s FTSE 100 rose to 2 percent, at Japan’s Nikkei it raised to 1.2 percent, and Germany’s DAX index achieved 2.4 percent, following the sudden rise in stocks.

[Source – AP]