Stocks pushed higher in the United States and Europe on Wednesday, as investors weathered some of the uncertainty over developments in the euro zone.
While stocks closed more than 1 percent higher in Europe and were up somewhat less on Wall Street, analysts said it was too early to declare a recovery in store for global financial markets, which had plummeted on Tuesday after the surprise announcement that Greece was planning a referendum on its latest bailout package.
The gains took place even as the tremors from Europe continued.
On Wednesday, “market conditions” caused a $3 billion bond offering by Europe’s bailout fund to be delayed, according to a spokesman quoted by news agencies. That delay caused an early rally in European stocks to fizzle and kept up pressure on debt of some countries with weaker economies, according to strategists at Brown Brothers Harriman.
Italian 10-year yields were stuck above 6 percent, for example.
But the crisis continued to rotate around developments in Greece. On Wednesday, an emergency cabinet meeting convened by the Greek prime minister, George Papandreou, ended with unanimous support for the government, according to local news outlets. Still, the opposition and some members of Mr. Papandreou’s own party called for new elections immediately.
Euro zone officials, including Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France, were holding talks on the eve of a Group of 20 nations summit meeting in Cannes, France.
Meanwhile, in the United States, policymakers from the Federal Reserve said “strains” in global financial markets were among the “significant downside” risks to the nation’s economic outlook, but they announced no new measures to stimulate growth.
Most analysts had expected the Fed chairman, Ben S. Bernanke, and his colleagues on the bank’s Federal Open Markets Committee to leave its main policies unchanged.
In early afternoon trading, the stock market eased back from earlier gains. TheStandard Poor’s 500 index was up 0.8 percent, after dropping 2.8 percent on Tuesday. The Dow Jones industrial average was up 0.8 percent and the Nasdaq composite index rose 0.4 percent.
The benchmark 10-year United States note yield was 2.00 percent, compared with 1.97 percent on Tuesday.
The Euro Stoxx 50 index, a barometer of euro zone blue chips, closed up 1.4 percent, while the FTSE 100 index in London rose 1.15 percent. The German Dax was up 2.25 percent and the CAC 40 in Paris rose almost 1.4 percent.
“Markets are seriously pondering a disorderly default in Greece and risk assets are tanking,” said analysts at Crédit Agricole CIB in a note to clients. “There is little prospect of any turnaround today unless officials can pull a rabbit out of the hat today, but even the rabbit is likely to remain elusive.”
The analysts said that investor sentiment was also hurt by weaker-than-expected Chinese manufacturing data released Tuesday.
Asian shares were mixed. The Tokyo benchmark Nikkei 225 stock average fell 2.2 percent. The Sydney market index S. P./ASX 200 fell 1.1 percent. In Shanghai the composite index rose 1.4 percent, while the Hang Seng index in Hong Kong closed 1.9 percent higher.
The currency market is likely to remain jumpy, the analysts at Crédit Agricole wrote, as worries over Mr. Papandreou’s proposed referendum will probably persist for some time.
“The fact that this referendum may not take place until January will bring about a prolonged period of uncertainty and further downside risks for the euro against the U.S. dollar,” they said.
In the early afternoon in New York, the euro was up to $1.3724 from $1.3703 late Tuesday.
United States crude oil futures for December delivery rose 0.2 percent to $92.42 a barrel. Comex gold futures rose 0.9 percent to $1,727.8 an ounce.
David Jolly contributed reporting from Paris and Kevin Drew from Hong Kong.
Article source: http://www.nytimes.com/2011/11/03/business/daily-stock-market-activity.html?partner=rss&emc=rss
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