What makes share prices rise and fall? Read on...?

Question

Is it controlled solely by people buying and selling stock, or does consumer buying have something to do with it i.e. if millions of people buy LG phones, will that make the share price increase?

Answer 1

In the end, the price rises and falls depending on what people are willing to buy or sell the stock for.  But if a company is doing very well, there are likely to be more people wanting to buy their stock and willing to pay a higher price.

Answer 2

It is a combination of many thing - supply and demand i.e. the more people that want to purchase a share in a company and the fewer that want to sell will push the prices up.  This is generally driven by the fortunes of the underlying company.

General market conditions and economics also play their part - a company may still be returning good profits but their sector may be out of favour.  It really is not down to one thing in particular.

Answer 3

It is just demand and supply, people buying LG phones in the millions is already priced in to LG shares, just like buying Cadbury's at Easter because they sell most chocolate then won't reap you any extra reward, it's priced in to the Cadbury's shares anyway ... if suddenly LG came out with a phone that was THE phone of 2008, and every kid had to have it, then the share price would rise to reflect this .... likewise if Cadbury at Christmas/Easter said they sold 40% less chocolate than last year, then the share price would fall.

A share price pretty much reflects all known news and views at any given time (so the theory goes) .... so movements are generally based on technical factors (which links into supply and demand anyway) and news flow

However, sometimes a company like BA might beat forecasts etc ... and the share will rise, but then might aggressively be sold off because people might argue that there is no growth left, and they've peaked ... there are hundreds of factors, it's not just a case of company beats expectations it goes up ...

Answer 4

A very difficult question to answer but share prices are influenced by absolutely anything   for example.

Natural Disasters,   take 9/11  for example hit share confidence.

Company decisions and forward plans of their intentions may not be in favour with market analysts and could affect share price.

Of course, if someone forecasts a super profit for the next up and coming quarter then people become very interested.

Massive interest,  ie, someon in the paper tips the share for no obvious reason there is such a huge demand it forces the price up.

To be honest there are so many things that affect share prices,  even bad news for a company can affect its share price.

Answer 5

If the company beats earnings then the stock can go higher. however, external force like consumer sentiment, economic situation, inflation, can cut the gain. if there is more people buying stocks, then the stocks will go higher. if more people are selling than buying, then the stocks are going to dip

Answer 6

Good ol supply and demand.

If there is more demand for a stock, the price will go up.

Once people decide to cash in and start selling the price will go down.

Answer 7

If a company is selling a lot of stuff at a profit it's earnings will go up.  It is this increase in earnings that makes the stock more attractive.

As far a consumer activity, the direct answer is "no".  This is because the consumer is buying from Best Buy, not from LG.  Indirectly, if Best Buy thinks something is going to be popular and buys a bunch from LG, then LG has earnings, whether Best Buy can sell them or not.  Over time, consumer purchasing from Best Buy will cause Best Buy to replenish it's inventory.  Assuming it replenishes with more LG phones and not Motorola phones, the this is good for LG.