Why Do Stock Prices Go Up And Down?

What makes stock prices go up and down? Share prices go "up" and "down" every day because of “supply and demand”. If more people want to buy than sell a stock, this will drive up the share price. Conversely, if more people want to sell than buy a stock, there will be greater supply than demand, and the share price will fall.

Here we will look at the various reasons that cause investors to want to purchase or sell a stock. If you understand this you will know why stock market prices rise and fall.

Why Stock Prices Go Up:
- After a stock split, the stock price may go up as more people rush to buy stocks at lower rates.
- When a company buys back its own shares, the fewer remaining shares in the market tend to go up in price.
- Other stocks in the same industry group or sector go up.
- The company achieved success in growing sales.
- Company earnings are more than the prediction.
- Announcing exciting new product and service.
- More exciting products and services are expected.
- Enter into a new business with the expectation of more profit for the company in future.
- The company hire a new CEO with a proven track record of success.
- The company successfully lands a huge contract.
- An increasing number of people are purchasing the products.
- The company is acquired by or merged with another big company.
- Acquisition rumors.
- Other good company news.

Why Stock Prices Go Down:
- Sales and profits drop.
- Lots of people are selling shares on the same day.
- Other stocks in the same industry group or sector go down.
- Someone files a lawsuit against the company.
- Government makes stricter rules or laws that might hurt sales.
- Negative rumors about the company.
- The company's workers go on strike.
- A natural disaster.
- A recession occurs.
- Other bad news.

* Featured Articles:

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Why Does the Stock Market Price Rise and Fall?

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