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Stock market reacts to Obama budget proposal

Writer

Published: Friday, February 25, 2011

Updated: Friday, February 25, 2011 14:02

 

Last week, President Obama unveiled his budget for the next fiscal year, proposing a
$3.73 trillion budget. One of his major goals is to decrease the national deficit. The president
suggested freezing the domestic, non-defense spending for five years in order to cut $400 billion.
The resulting budget has been greatly disputed this past week. The GOP-dominated
House of Representatives is at odds with the Democratic Senate as both groups try to amend
the budget. In a spending outline released last week, House Republicans want to cut funding
to programs such as Obama's high-speed rail initiative, the Environmental Protection Agency,
and energy programs. In response to these proposals, Secretary of State Hillary Clinton said at a
news conference that the proposed cuts would be detrimental to America's national security.
Despite the politically contested budget, the Associated Press reported that US stocks
ended the day mixed. Though investors anticipated a decrease following President Obama's
announcement, there was generally little change. Bond prices were steady after the release, while
the DOW fell 5.07 points (<0.1%), pulled down by Wal-Mart Stores following an unfavorable
analysis by JPMorgan. Standard & Poor's 500 index rose 3.17 points (0.2%) and NASDAQ
gained 7.74 points (0.3%).

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