INVESTMENT ACCOUNTS » Investing Money

The stock market and oil prices have both made noted adjustments following news that Osama bin Laden was killed by U.S. forces on Sunday night. Investors, reacting favorably to the news issued by President Barack Obama, responded with a reasonable increase in shares and noted slip in crude prices.

Bin Laden’s Death Prompts Stock Reactions

The Dow Jones Industrial average jumped 0.5 percent at the end of the day on Thursday, helping it reach the highest level in nearly three years. While the gains proved to be impressive, some say they were muted a bit due to disappointing readings in manufacturing and labor.

The Dow Jumps 52 Points

Thursday was a good day for the Dow as it surged 52 points to end at 12,505.99, a high not seen since June 2008. Gains were said to be led mostly by a nearly 4-percent surge in shares of Travelers, along with an average 2-percent jump in both IBM and Alcoa.

With news that Standard and Poor’s (S&P) cut its outlook on America’s AAA debt rating from stable to negative, the stock market responded negatively. After S&P announced its new outlook at the U.S. on Monday morning, Wall Street indexes dropped at least 1.6 percent in afternoon trading.

S&P Lowers America’s AAA Debt Rating

Newly opened documents reveal JPMorgan Chase broke its duty to clients by failing to warn the investments they were involved in were headed for trouble. The documents, which were unsealed as a part of a lawsuit filed by bank clients against Chase, show that top executives at the firm had advanced knowledge of problems with an investment vehicle called Sigma, but chose not to move millions in client assets out of it.

JPMorgan Chase Knew Sigma Was in Trouble

Reports are circulating that Japanese automaker Toyota’s credit rating could get downgraded by Moody’s due to the earthquake that has left it unable to fully operate since March. However, this not-so-great news was balanced by the announcement on Wednesday that it had sold its 1 millionth Prius hybrid in the United States.

Moody’s Could Give Lower Credit Rating

A survey released on Thursday by the Federal Reserve revealed that during the recession, household income dropped 23 percent. Surveying the Aftermath of the Storm took a broad look at the financial crisis and how it impacted individual households between 2007 and 2009.

Median Net Worth Falls by $29,000

As a result of the struggling economy during the recession, the median net worth of households fell from $125,000 in 2007 to $96,000 in 2009. But that’s not the only effect the recession had on household assets. According to the survey:

Turbulence across the globe is as prevalent as ever, which means the economy remains in a rocky state. Some areas of finance have been impacted positively, like climbing gold prices, while things like overly-cautious baby boomers stinting our economic recovery are not such great news. It’s enough to drive even the most savvy investor to drink, but he may want to think twice about grabbing a bottle of wine from Wal-Mart.

Gold Reaches Record High Thursday

Government bonds have stood as a reliable long-term investment for decades, but the idea of “long-term” investing may be taken to a new extreme soon. In early February 2010, the Treasury Borrowing Advisory Committee (TBAC) announced the Fed is considering issuing bonds that mature as far out as 100 years. Well, it isn’t hard to figure out that the odds of outliving a maturity date that far off are slim-to-none.

Why would the Fed consider issuing a bond with a 100-year maturation date and why would anyone even consider purchasing this type of bond?

Fears of a major U.S. stock sell-off were confirmed on Tuesday after Japan’s Nikkei index ended down nearly 11 percent. The risk of radioactive material leaking at the Fukushima Daiichi nuclear power plant leaves many investors fearful of a nuclear crisis after an 8.9-magnitude earthquake caused significant damage to the plant and resulted in explosions on Saturday.

Japan’s Nikkei Index Dropped as Low as 14 Percent

While markets experienced a significant downturn on Thursday due to continued tension in the Middle East, it was turmoil in Asia that was cause for concern today. Luckily, it appears the impact on U.S. stocks is minimal.

President Obama is also attempting to minimize the damage caused by rising gas prices and is prepared to tap our oil reserves if necessary. While the Obama Administration may save us from pain at the pump, struggling homeowners have still received little assistance as yet another failed HUD program was eliminated in a House vote today.

Stock Market Steady Through Japan Quake