Condition of the World Economy

Best Growth Stock – Stock markets throughout the world suffered heavy losses on the bad news from Spain and market problems worldwide. The events were set in motion by the selling off of large number of shares in the U.S. stock market a day before. Losses were also reported by the European stocks. While price of the shares of FTSE 100 in England dropped by 0.4 percent, German company DAX saw their price slump by 0.6 percent. There was a 0.8 percent fall in the stock price of France-based CAC 40 as well. The stock markets in Asia fared even worse and saw the stock prices fall drastically. The value of the shares of Japan’s Nikkei dropped by 2.4 percent. Hong Kong-based company Hang Seng’s stock value decreased by 1.5 percent. The fortunes of Shanghai Composite were only slightly better; their share prices declining by 0.2 percent. The roots of this worldwide market slump have been traced to the situation in Libya, where forces under the command of Moammar Gadhafi clashed with the rebels in the eastern part of the country.

The huge rush to unload shares in the U.S. market resulted in all the three chief stock indexes suffering losses in excess of 1 percent. The situation was worsened by the nearly 3% rise in the price of oil, which amounted to one barrel of oil being priced at $102. Price of the U.S. dollar dropped further against euro and pound. The situation improved marginally on Wednesday, though majority of the investors chose to remain cautious. Caterpillar (CAT, Fortune 500) and 3M (MMM, Fortune 500) registered the highest gains on the Dow Jones Industrial Average (INDU), which rose by 9 points or 0.1%. The S&P 500 (SPX) also gained 2 points i.e. 0.2%, while the Nasdaq (COMP) saw a 0.4% rise, increasing by 11 points. Reports of the Yahoo aiming to sell the shares of its 30% ownership in its Yahoo Japan project did not prove a deterrent to its fortune as its share prices increased by 3.3%. In fact, Yahoo (YHOO, Fortune 500) posted major gains in both the S&P 500 and Nasdaq exchanges. Price of Apple stock (AAPL, Fortune 500) also rose by 0.8% after Steve Jobs, CEO of the company, unveiled the iPad 2 in San Francisco.

In the job market, conditions improved to some extent. The report of the Automatic Data Processing Firm (ADP) for February showed number of jobs in the private sector increasing by 217000. This far exceeded the market analysts’ estimation of job increase to be around 165000. In another report made by the firm Challenger, Gray & Christmas, the companies were said to have plans of cutting 50702 jobs in February.

President and chief investment officer of Jurika Mills & Keifer, Karl Mills said that they are hoping for a turnaround in the market, much of which, he felt, depended on the price of oil. Incidentally, on Wednesday oil price had reached its highest point since September 2008. Mills remarked that the market under present conditions can handle the oil situation, but just so. Any further increases in its price will impediment the economic growth of Europe.