American investors on New York's Wall Street joined in a race to buy shares on August 18, sending prices soaring in hopes that interest rates would keep on falling.
GV Activity at Wall Street stock exchange. (3 SHOTS)
GV TILT DOWN London stock exchange building. (2 SHOTS)
GV Activity on floor of exchange.
GV Financial Times Index board showing FT ahead 22.4 points at 580.6 PAN TO stock brokers.
SV Dealers in stock exchange. (3 SHOTS)
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Background: American investors on New York's Wall Street joined in a race to buy shares on August 18, sending prices soaring in hopes that interest rates would keep on falling. The rush was initiated the previous pessimistic notion that interest rates would rise later in the year. His unexpected counter-prediction caused a record one-day rise of 38.81 points to 831.24 in the Dow Jones Industrial Average. This affected all other major markets. In Tokyo, prices surged after plummetting to a two-year low the day before, and the market recorded its best performance for six months. Markets in Singapore, Hong Kong, Sydney and Melbourne followed suit, and so did European markets. At noon, the London stock exchange share index was up 17.9 points at 576.1. Gold prices everywhere also shot up, but the dollar lost value on some foreign exchange markets, where dealers feared it would lose some appeal after the drop in U.S. interest rate. The pound sterling rose to 1.7280 U.S. dollars in London, but finished weaker than other European currencies. Analyst in the United States and London, however, doubt that such furious trading means national economies are recovering. They believe the trend will soon revert to its current sluggishness, as it becomes obvious both countries are firmly in the grip of long-term economic recession.