cit bankruptcy october
Housing and Manufacturing Reports Boost Stock Market
Better than expected results from the manufacturing and housing sectors are providing a boost to the stock market. The manufacturing index came in at 55.8, well ahead of the projected 52.1 economists were expecting. Anything higher than 50 is indicative of growth. The report represents the third consecutive month the industry has reported growth, and the number was higher than it’s been at any time since April of 2006.
The National Association of Realtors reported an eighth straight month of rising home sales, with pending contracts rising 6% in September. This increase was also larger than economists had predicted.
Stocks are on the rise as manufacturing and housing reports come in with good results, providing many with the belief that the economic recovery will sustain. Surprisingly, Ford Motor Company reported a surprising profit, supporting early Monday gains. The governments Cash for Clunkers program and in-house cost reductions helped Ford to post earnings of almost $1 billion for the third quarter. Ford stock rose more than 9 percent.
The market has been unaffected so far by news that the commercial lending company CIT Group Inc. filed for bankruptcy protection Sunday. The company had tried to avoid the step by offering to exchange debt with bondholders, an offer that was turned down. The bankruptcy filing was partially expected, as the company has been trying for months to restructure its debt. It is one of the largest bankruptcy filings in US corporate history.
Stocks had a tumultuous week last week, posting four-month losses on Friday after nice gains on Thursday from expectations of strong economic growth for the third quarter. The losses it suffered on Friday brought the S&P to a loss for October, the first monthly loss for the index in eight months.
The third quarter growth for the economy is in large part due to the governments stimulus programs. Investors fear that after those programs expire the high jobless rate and low consumer spending will hurt the recovery.
With the year’s end looming, investors are hoping that the investments they’ve made in the expectation of an economic turnaround were sound. Even with the loss it sustained for October, the S&P index is still 53% higher than the 12 year low set in March.
About the Author
Ron Parks is one of the top real estate agents in Marin County. His website features facts, figures and home search capabilities for the Marin real estate market. His website also features the infamous Marin monthly real estate report which receives thousands of visitors per month, as does his Marin News Blog.
