Moving Markets

Many factors contribute to moving markets. Experts cannot tell exact

Investor Actions. Individual investors, institutional investors (organizations that buy and sell high quantities of securities and have sizable portfolios) and mutual fund managers all affect the price of securities by their actions in buying or selling. For example, when large numbers of individual investors invest in the stock market on the basis of encouraging economic news, the overall market can rise, which, in turn, may "lift" the price of individual stocks.

Business conditions. Profits, volume of sales, and expansion of a corporation's plants all affect investor interest and, consequently, stock prices. Health of the economy, business conditions in general, and the business cycle (i.e. the normal times of high and low sales during the year) also affect stock prices.

Government actions. Government decisions regarding issues such as interest rates, taxes, trade policy, and budget deficits affect stock prices.

Economic Indicators. Published measurements of the buying and selling activities of companies and the spending and saving activities of individuals-including measurements of personal income levels, employment, consumer spending patterns, business inventories, and interest rates-affect various industries and subsequently stock, bond, and futures prices. The gross domestic product is a dey indicator that is calculated by the U.S. Department of Commerce four times a year. It measures the value of goods and services produced throughout the nation in a given quarter.

International events and conditions. Events around the world, such as changes in the curency exchange rates, trade barriers and restrictions, wars, natural disasters, and civil strife also affect stock prices.

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