Wall Street finished slightly ahead to close the week on Friday. The NASDAQ performed the best by far, with a 0.74 percent (15.69 points) gain on the day. This was followed somewhat closely by a 0.29 percent (3.08 points) gain by the S&P, and finally by a 10 percent (10.05 points) gain on the Dow Jones.
Market analysts expected Wall Street to fall back a bit in the morning to open the day today, but the quick fall at the opening bell may have surprised investors. Markets fell a bit more than most had projected, perhaps driven by worries about a growing debt problem in European governments.
According to Bloomberg News, the European G-7 has already pledged to deal with their own government finance problems internally, while not ending the state-stimulus programs that are essentially propping up the economy. However, investors are still wary of relying on a government to simultaneously stimulate domestic growth while also controlling spiraling accumulations of debt.
What we see in some European countries today may only be the tip of the proverbial iceberg when compared to the debt-stimulus problems facing the United States in the next few years.
In other news the once disgraced former chief of Merrill Lynch & Co., John Thain, has been given a second chance to be a leading executive. This time, Thain’s place of business is struggling small-business lender CIT Group. Thain was forced out of Merrill Lynch after creating an environment that allowed the company to go bankrupt, and eventually be absorbed by Bank of America in a government-sponsored merger.
Thain was removed from his post as CEO, after being handsomely compensated for two years of bad performance, and has largely been out of the spotlight. Now, instead of creating the chaos, he is being brought in with the hope that he can fix someone else’s mess.
Thain comes to the forefront of America’s leading small-business lender at a time when the president has made his small-business plan a clear initiative for 2010. This could mean more bailout support for CIT, which was grossly underfunded in comparison to Wall Street giants, and similar organizations. It could also mean that even deeper tax cuts are in store for American entrepreneurs. Hopefully those cuts start showing dividends before the cost of lowering taxes has a broad negative effect on the economy.