Early Tuesday Sees Stocks Flat as Investors Tread Carefully Following Paulson’s Statement
As of early Tuesday morning, stocks first saw little change and then dipped during the first few hours of chopping trading, following U.S. Treasury Secretary Henry Paulson’s acknowledgement that there was no quick solution to liquidity concerns rattling global markets.
“There's not going to be a quick solution to some of the issues in the credit markets,” said Paulson in a CNBC interview.
Already worried that the Federal Reserve may not have taken bold enough action to beef up reeling credit markets, investors are continuing to be cautious. Widening fallout from problems in the risky U.S. subprime mortgage sector have led to sharp declines in world stocks over the past month.
Global investor confidence has recovered a bit since the Fed's move but underlying worries about, and signs of, a global liquidity drought remain.
"We are still in a situation where we can expect some volatile days," said Richard Hunter, head of UK equities at Hargreaves Lansdown. "On the one hand confidence is going to take a little while to return and on the other hand before such time as the extent of the credit problems are known it's going to be very difficult to move on in any meaningful way."
Published on August 21, 2007
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