February 28, 2024

Stocks Turn Down After Two-Day Rise

A two-day rally driven by hopes that Europe had a plan to contain Greece’s debt crisis and shore up the Continent’s other struggling countries faded Wednesday amid reports of divisions among leaders.

Wall Street’s major indexes were jittery much of the day before falling about 2 percent late in the trading session. The Standard Poor’s 500-stock index lost 2.1 percent, or 24.32 points, closing at 1,151.06. The Dow Jones industrial average fell 1.6 percent, or 179.79 points, to 11,010.90, and the Nasdaq composite index dropped 2.2 percent, or 55.25 points, to 2,491.58.

The past few weeks have seen remarkable volatility, particularly in European shares, with investors responding to every twitch from European leaders on whether Greece would get its next loan installment, whether national parliaments would agree to a stronger pan-European bailout fund and whether there was a credible plan to save Italy and Spain from needing rescue loans themselves.

A pushback against a call to slash the amount Athens owes creditors renewed uncertainty about Greece’s path on Wednesday, although no news emerged from Europe to confirm the suspicions.

In France, the CAC 40 fell 1 percent, while the DAX in Germany fell 0.9 percent. The FTSE index of leading British shares was down 1.4 percent. The euro, however, held its own against the dollar, rising 0.2 percent to $1.3617.

The relatively small moves in the markets for most of the day may be a sign they are waiting to see how the coming events unfold. Finland approved the proposals to strengthen the euro zone bailout package on Wednesday, and Germany was to vote on Thursday.

“The markets are readying themselves for concrete news now but the slow progress of politics could mean the markets are setting themselves up for a fall,” said Jane Foley of Rabobank.

Meanwhile, whatever happens with Europe, the larger global economy still looked fairly weak, and the price of oil fell again Wednesday on expectations that slow growth would weaken demand for raw materials.

Benchmark oil in New York fell 79 cents to $83.66 a barrel.

Earlier, shares in Asia lost steam after spending the morning in positive territory.

Japan’s Nikkei 225 index eked out a gain of less than 0.1 percent to close up just 5.70 points at 8,615.65. Australia’s S. P./ASX 200 was 0.9 percent higher at 4,039.50. But South Korea’s Kospi gave up earlier gains and closed down 0.7 percent to 1,723.09.

Hong Kong’s Hang Seng sank 0.7 percent to 18,011.06, while benchmarks in Singapore and Thailand also fell.

Article source: http://www.nytimes.com/2011/09/29/business/daily-stock-market-activity.html?partner=rss&emc=rss

Speak Your Mind