Stock prices steadied at modestly higher levels as Wall Street staked a rally on rising prices of gold and oil. Weakness in the U.S. dollar helped propel commodities broadly as gold jumped above $1,000 an ounce but was retreating as noon approached. Crude oil reclaimed the $70 a barrel mark. In the meantime, the dollar hit its lowest level in nearly a year against a basket of currencies. Read and listen to what the pros had to say...
S&P Could Slump to 870
The S&P 500 is running out of steam and could slump to 870 pointsif a key support level is broken, said Roelof van den Akker at ING Wholesale Banking. “This uptrend is running out of steam … the momentum chart is already showing a series of lower peaks and that’s the same situation as in June, July of this year and this was the sign of a modest 8 percent correction in the equity markets,” he said.
Not Out of the Woods Yet
R. Glenn Hubbard, former chairman of the Council of Economic Advisers, said although there won't be a double-dip recession, the recovery will be relatively slow. “We’re better, but we’re not out of the woods—it’s going to take a while for consumers to rebuild and Washington has gotten awfully complacent about financial reform—we’ve got some unusual policy coming down the pipe,” he said.
Financial Risks Still Unsolved
The extent of government stimulus measures is unbelievable and the stock market is right to be rising, but the risks in the financial system remain unaddressed, said Will Hutton of The Work Foundation. “The structure of modern finance was very unstable and the financial system was getting too large compared to the real economy and contained a lot of systemic volatility and risk.”
US Jobless Rate Coule Peak at 10%
The higher-than-expected August U.S. unemployment rate of 9.7 percent "is a short-lived trend," said David Page from Investec. “That trend is likely to continue.” He expects the economy to grow in the second half of this year and accelerating gently into 2010. “But that acceleration not taking growth sufficient to stop the rising unemployment until the middle of the year,” he said.