Weak Open for Stocks, Health Care to Cost $940 Billion

Markets jumped on Wednesday and each major Wall Street index finished the day at an 18-month high. Most of the movement was a result of Japan following the U.S. lead by keeping its central bank interest rates at historic lows. The S&P 500 led the way with a 0.58 percent (6.75 point) rise, followed closely by both the NASDAQ (0.47 percent, 11.08 points), and the Dow Jones (0.45 percent, 47.69 points).

The early indication from overnight futures and world market data was that stocks would be set to surge at the opening bell today. However, markets had barely moved by 10am, and the sluggish start seems to project a weak day overall.

According to CNNMoney.com, there is little reason for the poor start but investors seem wary of pushing too hard on the back end of a week-long rally.

One fact that could boost investor confidence later in the day is news from the Labor Department that initial jobless rates fell for the week ended March 13.

In other news, according to Bloomberg News, the cost of living in the United States remained unchanged in February. This seems to indicate that the Federal Reserve projection of low inflation during the recovery was a solid estimate.

February 2010 was the first month to not see a rise on the consumer price index since March 2009, when the CPI actually declined. The so-called “core index” increased 0.1 percent, a sum in lock step with low inflation, but when food and fuel costs are added to the total it drops to 0.0.

Perhaps the biggest news of the day is a new estimate from the non-partisan Congressional Budget Office showing that the Democrat’s revised health care bill will cost $940 billion over the next ten years.

According to sources of CNN, the bill is set to reduce the deficit by $130 billion in the first decade and, assuming it is not rescinded by Republican lawmakers, it would reduce the deficit by $1.2 trillion the following decade. Perhaps most importantly, the new health care legislation is within the current budget outlook. Unlike our wars and bailouts, which were not “paid for”, the health care legislation has been budgeted.