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Stocks Rebound As Oil Prices Rise

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http://www.nytimes.com/2009/08/20/business...mp;ref=business

Stock markets in the United States turned positive on Wednesday afternoon after an unexpected dip in crude-oil stockpiles pushed oil prices higher.

Markets opened sharply lower on jitters about sharp declines in the Chinese stock markets, butthe major indexes had clawed back all of their losses and had vaulted into positive territory.

At 2 p.m., the Dow Jones industrial average was 76 points or 0.8 percent higher, and the wider Standard & Poor’s 500-stock index was also up about 0.8 percent. The Nasdaq composite was 0.7 percent higher.

The move extended Wall Street’s gains from a day earlier, when the major indexes rebounded from a 2 percent drop on Monday.

“People are still willing to buy on dips,†said Robert Francello, a San Francisco hedge fund manager. “People are willing to put money to work if there’s any sustained sell-off.â€

Energy producers led the gains on Wednesday, and health care companies and retailers also gained ground.

Oil rose by $1.43 to $70.62 a barrel after the Energy Department said that average crude stockpiles in the United States fell 8.4 million barrels last week. Shares of oil companies including Exxon, Marathon Oil and Chevron all rose.

That helped to mute the effects of a bearish growl from China.

The activity in China’s stock markets was startling. After huge gains earlier this year, the Shanghai composite index slipped into bear-market territory, having fallen close to 20 percent over the last two weeks. The index closed 4.3 percent lower on Wednesday, dragging Asian markets lower on concerns that the Chinese economy might not lead a global rebound.

So making oil more expensive helps the economy?

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http://www.nytimes.com/2009/08/20/business...mp;ref=business

So making oil more expensive helps the economy?

*sigh* i remember the days when falling oil prices used to make the markets rise.

Great days, great days.

I guess in all seriousness, when oil was ridiculously high it was crushing the us economy, nowadays rising oil prices may be interpreted as increased demand (although where opec oil cuts come into this i don't know).

Edited by slurms mackenzie

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People think, or so it appears to me, that when stocks gain value against cash the economy is improving. I haven't heard an explanation of why but they always announce it as good news. I guess currency debasement helps the Capitalists at the top because everyone else is impoverished and relies on them more.

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http://www.nytimes.com/2009/08/20/business...mp;ref=business

So making oil more expensive helps the economy?

Ah reading it again, it's the weighting of the oil companies and the relative increases for those which have made the market rise.

<<edit actually i haven't got a effin clue>>

Edited by slurms mackenzie

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*sigh* i remember the days when falling oil prices used to make the markets rise.

Great days, great days.

I guess in all seriousness, when oil was ridiculously high it was crushing the us economy, nowadays rising oil prices may be interpreted as increased demand (although where opec oil cuts come into this i don't know).

or more accurately stocks rose because today there were more buyers than sellers, news headlines are pointless drivel when it comes to explaining a daily market move, they simply make up whatever they want as the reason, the real reason is something only the market itself knows.

They may aswell have stated stocks rallied because Harry Potter killed Voldermont

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Rising oil price indicates demand for 'stuff'. Said stuff needs investing in to make more stuff for more people to buy more of. More stuff needs more oil, then oil goes up, everyone sees oil going up and wants some of that action, oil goes up somemore, oil too high, red alert, economy crashes ,rise and repeat.

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Guest Steve Cook
Rising oil price indicates demand for 'stuff'. Said stuff needs investing in to make more stuff for more people to buy more of. More stuff needs more oil, then oil goes up, everyone sees oil going up and wants some of that action, oil goes up somemore, oil too high, red alert, economy crashes ,rise and repeat.

Yes.

For the next few decades.

And then.....?

Then we are in a very different world from the one we currently know.

Edited by Steve Cook

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They use the word 'as' very carefully, so as not to imply one caused the other or even limited the other's rise. They simply say the two happened concurrently. This, I guess is to limit the possibility of a lawsuit.

Generally, though oil price rises are bad for stocks.

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Yes.

For the next few decades.

And then.....?

Then we are in a very different world from the one we currently know.

I hope it will be better in the long run, less 'stuff', the journey from here to there however may have a few icebergs.

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http://business.timesonline.co.uk/tol/busi...icle6802911.ece

Stock markets across Asia rose sharply today, following a rebound in American shares last night after a surprise fall in crude oil stockpiles.

The drop in oil stockpiles suggests that demand is likely to grow soon and push up prices for crude, currently trading up at $72 a barrel. Last night, after a poor start, the Dow Jones industrial average finished the day 61.22 points higher at 9,279.16.

In Japan, the Nikkei 225 rose 1.8 per cent to 10,390.74, after closing at a three-week low yesterday, while Hong Kong's Hang Seng rose 1.9 per cent to 20,336.36.

Market sentiment in Japan was also improved by a poll predicting a landslide victory for the opposition party in the August 30 elections.

Reported the same in the Times.

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Yesterday, the rise in stocks was accompanied bya rise in oil, gold and sovereign debt. Rather than an appetite for risk, that seems to signal global QE diluting the value of paper money across all other asset classes. I wonder how long this can last while consumer credit continues to fall and earnings flatline

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