You can keep up with stock prices in the financial section of most major newspapers.

When you buy a stock you're no doubt hopeing to turn it into a profitable investment by watching its market value rise. The problem is, you're buying the stock from another investor who probably expects the stock price to drop. Nobody has a crystal ball that reveals whether stock prices will rise or fall, but there are some factors that influence a stock's value. The primary factor that determines the market value of any stock is supply and demand, according to the New York Stock Exchange. There are limits to the supply of any company's stock, even though that number might be in the millions of shares.

If more investors want to own the stock than there are shares available for sale, the market value of the stock rises.

Factors That Influence Stock Prices | eHow

If more investors want to sell their stock than there are available buyers, the stock's market value drops. While supply and demand dictates the market price of a stock, many factors also influence supply and demand. Companies that make money are typically more valuable than companies that lose money, though there are exceptions. A company that grows its earnings on a consistent basis is also more likely to hold its value than a company with erratic earnings growth.

A company's value is also influenced by how consistently it meets or exceeds earnings expectations set forth by analysts. A company that consistently meets its expectations is a more desirable investment to most investors than a company that consistently falls short of expectations. Finally, companies that perform well in both good and bad economic times usually see their performance rewarded by increases in their stock price.

The market value of stocks can be affected by economic trends that might have little or nothing to do with the individual company's performance.

Error Page

For example, if the whole country is experiencing an economic boom, the market price of an individual stock might rise in tandem with other stocks. If a company is part of a specific industry group that experiences a sudden downturn, its stock price can tumble even if the company factors that influence the market price of a corporations stock producing solid financial results. Breaking news can influence how investors perceive a particular company or the economy as a whole. News can have a positive or detrimental affect on stock prices, sometimes driving the price of different stocks in different directions.

Earn money taking surveys example, news of an impending war might cause defense stocks to rise but cause entertainment stocks to fall.

News of increases in interest rates or commodities can also affect the value of a company. Money is an emotional subject and sometimes emotions trump reason when it comes to stock investments, resulting in market prices being driven up or down far beyond what is justified by the company's performance. Mike Parker is a full-time writer, publisher and independent businessman. He helped launch DiscoverCard as one of the company's glenfield model 60 wood stock merchant sales reps.

Each week, Zack's e-newsletter will address topics such as retirement, savings, loans, mortgages, tax and investment strategies, and more. At the center of everything we do is a strong commitment to independent research factors that influence the market price of a corporations stock sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system.

These returns cover a period from and were examined and attested by Baker Tilly, an independent accounting firm. Visit performance for information about the performance numbers displayed above.

Skip to main content. More Articles What Factors Homes to buy in stockholm sweden the Price of Stocks? Factors That Affect the Stock Market What Causes Stocks to Increase or Decrease? Difference Between Market Value and Intrinsic Value How Long Till a Savings Bond Matures at Face Value? Supply and Demand The primary factor that determines the market value of any stock is supply and demand, according to the New York Stock Exchange.

Financial Performance Companies that make money are typically more valuable than companies that lose money, though there are exceptions. Economic Trends The market value of stocks can be affected by economic trends that might have little or nothing to do with the individual company's performance. News and Emotions Breaking news can influence how investors perceive a particular company or the economy as a whole. What Drives Stock Prices Securities and Exchange Commission: Stocks and Bonds Brigham Young University Marriott School: Know Why Stocks Fluctuate in Value.

Resources 2 New York Stock Exchange: Investing For Your Future CNN Money: Are Stocks Still a Good Investment? About the Author Mike Parker is a full-time writer, publisher and independent businessman.

Recommended Articles What Is Most Likely to Push the Price of a Company's Stock Higher? The Impact of Earnings Announcements on Stock Prices What Factors Influence the Value of Preferred Stock? What Is the Most Basic Factor That Affects Stock Price? Related Articles Mutual Funds That Rise When Market Falls What Determines the Bond's Market Price? Do Bond Funds Lose Money When Interest Rates Go Up?

Does the Value of a Stock Go Up if the Company Is Doing Well? Correlation of Treasuries With Stocks. Money Sense E-newsletter Each week, Zack's e-newsletter will address topics such as retirement, savings, loans, mortgages, tax and investment strategies, and more.

Editor's Picks Do Stocks Rise When the Dollar Falls? Tax Benefits of Underperforming Stocks How Speculation Raises Shares How to Hedge Long Equity Positions Gold Investment Trending Topics Latest Most Popular More Commentary.

Quick Links Services Account Types Premium Services Zacks Rank Research Personal Finance Commentary Education. Resources Help About Zacks Disclosure Privacy Policy Performance Site Map. Client Support Contact Us Share Feedback Media Careers Affiliate Advertise. Follow Us Facebook Twitter Linkedin RSS You Tube. Zacks Research is Reported On: Logos for Yahoo, MSN, MarketWatch, Nasdaq, Forbes, Investors.

Logo BBB Better Business Bureau. NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.