May 19, 2009

Hopes of a recovery in the US resulted in a rise in shares yesterday with the Dow Jones industrial average closing up 235 points at 8,504.08.The rise came after a better than expected profit report from home improvement company, Lowe’s Cos., leading analysts to believe recovery may be closer than previously thought.Shares plummeted last week on concerns that a recovery might be further off than hoped.James Cox, managing partner at Harris Financial Group, said: “There’s a realisation that things are going to get better.”

Other analysts have been cautiously optimistic stating that while they are looking for signs that the economy could be heading for a recovery, the fact remains that the downward spiral is slowing.Recovery of the US housing market is crucial to the recovery of the world’s largest economy, as is stability in the banking sector, according to analysts.Meanwhile, the banking sector received positive news with Goldman Sachs raising its rating on Bank of America Corp. to “Buy” on expectations for solid earnings in the second quarter.