U.S. stocks appeared set to open higher. Sharp swings in the final hour of trading have become the norm again as short-term traders sell positions before the close.
Federal Reserve Chairman Ben Bernanke provided encouraging comments yesterday saying that he does not expect the U.S. economy to fall back into a second recession. Economic data in recent months has shown that jobs are being created, the manufacturing sector has consistently expanded, consumers are spending and inflation remains tame. The recent volatility in the markets may reflect disappointment among the media and short-term traders, but is not indicative of another recession and should not deter investors from their long-term investment strategies.
U.S. small businesses are more optimistic about their economic outlook, but obviously remain hesitant to greatly expand staffs and boost capital spending. The National Federation of Independent Business said its monthly survey showed its second straight gain in May. We will get more information on regional economic conditions tomorrow with the Fed’s release of its beige book.
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