September 24, 2018

2 Central Banks Promise to Keep Rates Low

The bid to reassure investors brought the two central banks into closer alignment with the Federal Reserve, which, under Chairman Ben S. Bernanke, has become more open about its intentions.

At the same time, they appeared eager to signal that they would not follow the Fed in preparing for a gradual withdrawal of economic stimulus.

Mario Draghi, the president of the European Central Bank, based in Frankurt, said at a news conference that crucial interest rates would “remain at present or lower levels for an extended period of time.” Until Thursday, the bank had steadfastly refused to pin itself down on future policy.

“It’s not six months,” Mr. Draghi said. “It’s not 12 months. It’s an extended period of time.”

Mr. Draghi also said that the central bank was signaling a “downward bias” in interest rate policy, meaning further cuts were possible or even likely.

Only hours earlier, Mark J. Carney, who became governor of the Bank of England on Monday, made a similar break with tradition. The British central bank said in a statement that any expectations that interest rates would rise soon from their current record low level were misguided.

With their promises of easy money stretching toward the horizon, the central bankers offered more certainty to investors at a time when tensions in Europe are rising again. So-called forward guidance is considered one of the tools available to central banks, but it was one the European Central Bank and the Bank of England had not used before.

European markets reacted positively to the announcements, with the FTSE 100 in London closing 3.1 percent higher and the Euro Stoxx 50, a benchmark of euro zone blue chips, climbing 3 percent. (Markets in the United States were closed for the Fourth of July holiday.) The euro fell sharply, a development that was probably not unwelcome at the European Central Bank, since a cheaper euro makes European products less expensive in foreign markets, feeding exports. The British pound also fell.

Mr. Draghi said it was a coincidence that his central bank and Bank of England introduced forward guidance on the same day. Both left their main interest rates at 0.5 percent and did not announce any other policy moves. It was a day for talk rather than action.

“Mr. Draghi did what he does best today: intervene verbally to great effect,” Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, said in a note.

Mr. Draghi’s statement on Thursday came almost a year after he defused the euro zone debt crisis with a promise to do “whatever it takes” to preserve the currency union.

But after months of relative calm, Europe has been rattled in recent days by a political crisis in Portugal, which has raised questions about whether the region’s governments will be able to withstand popular discontent with their policies of cutting budgets to bring public debt under control. Investors have responded by pushing up the risk premium they demand on bonds issued by Italy, Spain and other troubled euro zone countries. Market rates on Italian and Spanish bonds retreated on Thursday after Mr. Draghi’s comments.

The commitment to keep rates low helps amplify the effect of rates that are already nearly rock bottom, by reassuring investors that they can count on easy money for the foreseeable future.

But some analysts saw Mr. Draghi’s statement as a bluff — a tacit admission that the central bank has run out of other ways to stimulate the euro zone economy.

“A change of a few words in the way he phrases the E.C.B.’s policy stance is an insufficient policy response to alter the — very troubled — course of the euroland economy,” Carl B. Weinberg, chief economist at High Frequency Economics in Valhalla, N.Y., said in an e-mail.

Jack Ewing reported from Frankfurt, and Julia Werdigier from London.

Article source: http://www.nytimes.com/2013/07/05/business/global/central-banks-of-europe-and-england-pledge-to-keep-rates-low-for-a-while.html?partner=rss&emc=rss

Wall Street Meanders

Stocks moved higher on Tuesday, with Home Depot at a record high and buoying the blue chips, while investors awaited Congressional testimony from the Federal Reserve chairman, Ben S. Bernanke, on Wednesday.

By afternoon the Standard Poor’s 500-stock index had gained 0.4 percent, the Dow Jones industrial average rose 0.5 percent and the Nasdaq composite was 0.3 percent higher.

The housing market recovery helped Home Depot report higher quarterly sales and earnings, prompting the world’s largest home improvement chain to boost its sales outlook for the year. Its shares rose 3 percent to $79.05 after hitting a record of $79.40.

Housing will continue to be a tail wind for stocks and an engine for economic growth in the foreseeable future, according to Jack De Gan, chief investment officer at Harbor Advisory Corp. in Portsmouth, N.H.

The United States economic calendar is thin and the market will continue to be vulnerable with the S.P. and Dow industrials near record highs. However, the expectation of continuing accommodative monetary policy from the Federal Reserve should continue to lend support to equities.

“There’s not strong enough evidence one way or another to change monetary policy,” Mr. De Gan said, adding that with all the support the Fed has given to equities there are also “fundamental reasons” driving the market.

The small- and mid-cap Russell 2000 continued to face technical resistance at the 1,000 point level but was within two pints of its all time closing high.

Goldman Sachs said in a note to clients dated May 20 that it expected the S.P. 500 to be at 1,750 points by the end of the year, a 5 percent advance from Monday’s close, and predicted a 12-month rally to 1,825. The bank’s economists forecast above-trend growth in 2014 in the gross domestic product.

The Carnival Corporation sharply reduced its full-year earnings outlook for the second time in less than three months. The company said it expected lower revenue because it has lowered ticket prices to attract passengers after a string of prominent mishaps. Its United States shares dropped 5.6 percent.

Best Buy, the consumer electronics chain, reported weaker-than-expected quarterly sales and warned that investments to win back shoppers could squeeze earnings in the near term. Its shares fell 5.1 percent.

Shares of JPMorgan Chase rose 2 percent on reports that shareholders had defeated a proposal to strip the bank’s chairman and chief executive, Jamie Dimon, of his chairman title.

Apple’s chief executive, Timothy D. Cook, testify before Congress after a Senate report on the company’s offshore tax structure said it had kept billions of dollars in profits in Irish subsidiaries to pay little or no taxes to any government. Apple shares fell 0.1 percent.

The medical device maker Medtronic reported a better-than-expected quarterly profit driven by strong international sales and its shares rose 5 percent.

The Eurofirst 300 index of top European shares ended the trading day up 0.1 percent, as traders took the uncertainty over central banks’ stimulus policies as a cue to lock in some of the recent sharp gains.

Earlier in the day, Japan’s Nikkei share index crept to a five-and-a-half-year high. The yen shed some of Monday’s gains after Japan’s economy minister said his comments the previous day that the government was satisfied with the level of the currency had been misinterpreted.

A recent downward slide in precious metals also resumed. Gold was down 1.1 percent, at $1,368 an ounce, as the stronger dollar left it facing its eighth fall in nine sessions.

Silver dropped as much as 2.2 percent to trade near the two-and-a-half-year lows hit during a 6 percent slide on Monday, when an unidentified investor sold off a large holding.

While low inflation prospects have dulled demand for traditional hedge gold, silver has fallen out of favor with investors recently as demand from the solar energy sector has sagged and silver mining has increased.

“The market was caught horribly short yesterday,” said David Govett, head trader at Marex Spectron, “so there was some buying this morning. But the dollar started to get stronger and gold didn’t manage to break above $1,400, so sales started again.”

Article source: http://www.nytimes.com/2013/05/22/business/daily-stock-market-activity.html?partner=rss&emc=rss

Stocks Keep Up Gains

The Dow Jones industrial average and the Standard Poor’s 500-stock index climbed to fresh highs on Thursday after data showed new jobless claims dropped more than expected.

The S.P. 500 and the Dow each rose 0.4 percent; the Nasdaq composite index was flat.

Technology stocks were the day’s underperformers. Tech blue chips like Microsoft and Hewlett-Packard were sharply lower after an industry report showed shipments of personal computers had fallen significantly in the first quarter. Microsoft was also hit after Goldman Sachs cut its rating on the stock to sell from neutral.

“It’s not a good day for technology stocks, but over all, we are in a strong market,” said Joe Bell, senior equity analyst at Schaeffer’s Investment Research in Cincinnati. “It’s encouraging to see how the market starts off weak on a bit of natural profit-taking, and then market participants instantly bid the market higher.”

Among the blue chips, three of the Dow’s five biggest gainers — Pfizer, Boeing and Home Depot — hit new 52-week highs.

Before the opening bell, Labor Department data showed initial claims for state unemployment benefits fell much more than expected last week, giving relief to investors who were rattled last Friday by a much weaker-than-expected nonfarm payrolls report.

The Dow reached a new intraday high at around 11:21 a.m. and extended that to a fresh record by early afternoon. The S.P. 500 quickly followed the Dow’s lead in late-morning trading, climbing to a new intraday high of 1,597.35 at 11:29 a.m.

On Wednesday, both the Dow and the S.P. 500 rose more than 1 percent to close at new highs after three straight days of gains.

The Dow got its biggest boost from Pfizer, up 2.6 percent, after JPMorgan raised its target price on the drugmaker’s stock.

A leading tech tracking firm said personal computer sales plunged 14 percent in the first three months of the year, the biggest decline in two decades of keeping records, in a report released after Wednesday’s closing bell.

Hewlett-Packard fell 6.8 percent, Microsoft shed 4.9 percent and Intel lost 2.8 percent. The S.P. information technology sector index slipped 0.6 percent.

Shares of Acadia Pharmaceuticals surged 57.3 percent after the drug maker said data from an initial late-stage trial would be sufficient to file for approval for its experimental antipsychotic drug for Parkinson’s disease patients.

Article source: http://www.nytimes.com/2013/04/12/business/daily-stock-market-activity.html?partner=rss&emc=rss

Big Gains on Wall Street After the Fiscal Deal

Wall Street cheered an agreement that ended the fiscal impasse in Washington, sending the Standard Poor’s 500 to its biggest gains in more than a year on Wednesday.

After being restrained for much of the last three months by the political squabbling over an array of tax increases and spending cuts known as the fiscal cliff, investors demonstrated their new willingness to take risks in a broad array of financial markets around the world.

Shares in more speculative investments rose much faster than blue chips, sending the Russell 2000 index of smaller companies up 2.8 percent to 873.42, its highest level ever. The benchmark S. P. 500-stock index rose 2.5 percent, or 36.23 points, to 1,462.42. One more day of the same magnitude will bring the index to its highest level since the 2008 financial crisis.

“You’ve just removed a huge worry from the market,” said Jonathan Lewis, the chief investment officer at Samson Capital Advisors. “We’ve been in a never-never land where markets have not been able to take their attention off Washington.”

Congress signed off on the deal late Tuesday night, and it immediately sent stocks soaring first in Asia and then in Europe. Leading indexes rose 2.6 percent in France, 2.2 percent in Germany and 2.9 percent in Hong Kong. Markets in Japan and mainland China were closed for holidays.

The Dow Jones industrial average rose 2.4 percent, or 308.41 points, to 13,412.55. The Nasdaq composite index increased by 3.1 percent, or 92.75 points, to 3,112.26.

Only 31 stocks in the S. P. 500 dropped on Wednesday. Technology and financial stocks did particularly well, as did stocks that offer generous dividends. The agreement on Tuesday raised the tax rate on dividends to 20 percent from 15 percent, less than President Obama had proposed.

In the United States, share prices gained most in the first 30 minutes of the day and then plateaued before a brief spike just before trading closed.

Many market strategists were worried that Wednesday’s rally would not last long because of the questions that were not addressed by the fiscal accord. While the deal provides a long-term settlement on tax rates, it delayed for only two months $110 billion of spending cuts that were supposed to start on Jan. 1. Congress also put off a decision about limits on government borrowing, known as the debt ceiling.

The Treasury Department has said that the government hit the ceiling at the end of 2012 and it will be able to finance the budget only by using extraordinary measures until March. Republican leaders in the House of Representatives have said they will raise the borrowing limit only if Democrats agree to more spending cuts.

That debate may well be more fractious than what has taken place in recent weeks, analysts said.

Leon LeBrecque, the founder of the asset management firm LJPR, said that Wednesday’s rally would not last long as investors turned their attention to the unanswered questions.

“We’re in a three-act play, but we’re only through with Act 1,” said Mr. LeBrecque. “Everyone is happy about the first act. The real question is what happens next.”

The last time the government reached its borrowing limit, in 2011, Congress approved an increase at the last minute. This led Standard Poor’s ratings services to strip the United States of its triple-A credit rating. There is widespread concern that one of the other two major credit ratings agencies will lower their rating of American government debt in the coming months.

On Wednesday, Moody’s Investors Service said that the fiscal pact did not help the nation’s debt and deficit problems and “will likely be a constraint on growth in coming quarters.” It said the looming negotiations over spending cuts and lifting the debt ceiling add “uncertainty to the outcome of negotiations.”

“The debt trajectory resulting from this process is likely to determine whether the Aaa rating is returned to a stable outlook or downgraded” by one notch to Aa1, the Moody’s report said.

But there is hope in some quarters of Wall Street that with each new crisis, and each last-minute fix, the risks to the markets grow less severe as investors become convinced that politicians eventually find solutions to their disagreements. Michael Purves, the chief global strategist for Weeden Company, compared the debates in Washington to horror movies: “Once you see the first movie, the sequels are never as scary.”

He said that at least for the near term, the resolution in Washington should allow investors to focus on the growing signs of improvements in the American economy.

The Institute for Supply Management said on Wednesday that manufacturing in the United States expanded slightly in December. Its manufacturing activity index rose to 50.7 points in December, up from 49.5 in November. Even more important data will come on Friday, when the monthly jobs report is released.

In the bond market, investors sold off the longer-dated Treasuries that have been used as safe havens in recent years. The price of the Treasury’s 10-year note fell 22/32, to 98 4/32, while its yield rose to 1.84 percent, from 1.76 percent late Monday.

This article has been revised to reflect the following correction:

Correction: January 2, 2013

An earlier version of this article misstated the surname of the chief investment officer at Samson Capital Advisors. He is Jonathan Lewis, not Jonathan Samson.

Article source: http://www.nytimes.com/2013/01/03/business/daily-stock-market-activity.html?partner=rss&emc=rss

Global Stocks Rally on Positive Economic News

PARIS — Stocks rose Tuesday in Europe and Asia after strong economic data from China and Germany, and Wall Street appeared headed for a strong opening as investors awaited a slew of important bank earnings.

The Chinese economy, which has been an engine of growth since the financial crisis arrived in 2008, grew at an annual rate of 8.9 percent in the last three months of 2011, down from the 9.1 percent in the third quarter of 2011, but better than many economists had expected.

In Mannheim, the Center for European Economic Research, known by its German initials Z.E.W., reported that its economic sentiment index
increased by 32.2 points in January from last month, reaching a level of minus 21.6 points, its highest point since last July.

It was the largest monthly gain ever for the index, Reuters reported.

“Contrary to repeatedly expressed fears of a recession, the assessment of the financial market experts gives reason for cautious optimism that Germany will only experience a dent in economic activity,” the Z.E.W. president, Wolfgang Franz, said in a statement. He also noted that the European Central Bank’s massive supply of funding to the banking sector last month could have contributed to the uptick.

The institute’s economic expectations index for the euro zone also gained, rising 21.6 points to stand at minus 32.5 points.

Citigroup and Wells Fargo were to announce their earnings later Tuesday, while Goldman Sachs reports on Wednesday and Bank of America on Thursday.

By midday, the Euro Stoxx 50 index, a barometer of euro zone blue chips, was up nearly 2 percent, while the FTSE 100 index in London was up 1.1 percent.

Standard Poor’s 500 index futures rose, suggesting major indexes would bounce higher when New York trading gets under way. U.S. markets were closed Monday for the Martin Luther King holiday.

A successful debt sale in Spain helped European stocks to rally for a second day.

In its first test of the market’s appetite for debt since it was downgraded by S.P. last Friday, Spain on Tuesday sold €4.9 billion, or $6.2 billion, in Treasury bills. It sold 12-month bills priced to yield 2.05 percent, down from 4.05 percent at the previous auction of such securities, in December, and 18-month bills at 2.35 percent, down from 4.23 percent.

The market’s new enthusiasm for riskier assets was reflected in European sovereign bond yields. French 10-year bonds rose in price, despite the Standard Poor’s downgrade Friday that clipped the country’s rating by one notch from the top AAA spot. The yield, which moves in the opposite direction of the price, fell 4 basis points to 2.98 percent.

Italian 10-years fell 14 basis points in yield, to 6.45 percent, while Spain’s 10-years yielded 5.03 percent, down 9 basis points. A basis point is equal to one-hundredth of a percent.

Analysts caution against reading too much into yields and auction results, however, as the European Central Bank has been intermittently intervening in the secondary market since August to help Spain and Italy. And they note that the fear factor in the interbank market remains at extremely elevated levels: European banks deposited a record €501.9 billion overnight Monday at the E.C.B., the central bank said Tuesday.

U.S. crude oil futures rose 2.0 percent to $100.64 a barrel. Comex gold futures rose 1.9 percent to $1,662.40 an ounce.

The dollar was mixed against other major currencies. The euro rose to $1.2788 from $1.2667 late Monday, while the British pound rose to $1.5385 from $1.5325. The dollar fell to 76.60 yen from 76.78 yen, and to 0.9459 Swiss francs from 0.9542 francs.

Asian shares posted solid gains. The Tokyo benchmark Nikkei 225 stock average added 1.1 percent. The Sydney market index S.P./ASX 200 rose 1.7 percent. In Hong Kong, the Hang Seng index added 3.2 percent and in Shanghai the composite index rose 4.2 percent.

Article source: http://www.nytimes.com/2012/01/18/business/global/daily-stock-market-activity.html?partner=rss&emc=rss

Stocks & Bonds: Shares Settle After Rally Over European Debt Deal

Stocks in the United States eased back on Friday from their biggest monthly rally in decades, ending relatively flat as the euphoria over Europe’s plan to address its sovereign debt crisis eased.

For the week, the three main indexes on Wall Street closed more than 3 percent higher, lifted mostly by the surge on Thursday that followed the announcement of the latest European rescue plan. The broader market in the United States, as measured by the Standard Poor’s 500-stock index, moved back into positive territory for the year.

But on Friday, some of the luster started to wear off as analysts focused on lingering doubts about whether the European plan would restore growth or bring long-term solutions to the sovereign debt problems in the countries that share the euro.

“The enthusiasm is fading,” Guy LeBas, a strategist at Janney Montgomery Scott, said in a market commentary.

The ratings agency Fitch said that progress needed to be demonstrated in several areas: achieving a broad-based economic recovery in the euro zone, reducing government budget deficits, and stabilizing and reducing government debt ratios. Otherwise, it added, financial market volatility and downward pressure on sovereign ratings would continue.

On Wall Street, the Dow Jones industrial average was up 0.18 percent, or 22.56 points, at 12,231.11 and the S. P. was up 0.04 percent, or less than a point, at 1,285.08. The Nasdaq was down 1.48 points at 2,737.15.

The Euro Stoxx 50 index of euro zone blue chips closed down 0.6 percent, while markets in Britain and Paris were also slightly lower. Germany’s DAX was up 0.13 percent. Asian stocks closed higher.

While some trading this week in the United States was inspired by corporate earnings, reports of mergers and economic data, the financial markets were mostly focused on the prospects of some kind of agreement on a way to resolve Europe’s debt problems.

Those hopes helped stocks to rise on Monday, but on Tuesday they sank after the abrupt cancellation of a meeting of European finance ministers that was meant to precede the meeting that resulted in the final plan.

Stocks rose again on Wednesday and powered higher on Thursday around the world after the summit meeting in Brussels.

“There is not enough detail around what is going on in Europe and until you get more clarification, you will probably get some days where you will see swings like this,” said Laura LaRosa, the director of fixed income at the investment and wealth management firm Glenmede in Philadelphia.

Still, the S. P. 500 was up 13.58 percent so far this month, its highest monthly gain since October 1974, when it rose 16.3 percent in the month.

Ross Junge, the chief investment officer for fixed income, at Aviva Investors North America, said the combination of modestly improving economic data recently for the United States and lower euro zone risks contributed to a “modestly positive” outlook for the credit markets.

“The key impacts from the announcement are investors’ increased confidence that the threat of a near-term systemic financial crisis will be avoided and the potential spillover risks to the U.S. economy and financial institutions should be reduced,” Mr. Junge said in a market commentary. “However, there will likely be additional bumps along the way.”

Ms. LaRosa said the price on the benchmark bond would rise as the market remained unsteady.

The United States 10-year Treasury bond rose to 98 9/32 from 97 24/32. The yield was 2.32 percent, down from 2.39 percent on Thursday.

Article source: http://feeds.nytimes.com/click.phdo?i=892be2a2558b42886586211929674510

Wall Street Opens Lower After Europe Rally

The Standard Poor’s 500-stock index was up 0.1 percent in early trading, while the Dow Jones industrial average was flat. The Nasdaq composite index was 0.4 percent higher.

The action was mostly in Europe. French lenders posted solid gains, leading European indexes upward, after the financial daily Le Figaro reported that the French government was prepared to act to help “two or three banks.” The Figaro report did not identify the source of its information, and news agencies cited French officials as denying that such a plan was in the cards.

BNP Paribas rose 5 percent, Société Générale rose 2.9 percent and Crédit Agricole gained 2.1 percent. Dexia, the failing bank that the French and Belgian governments this week said they would guarantee, began the day higher but by afternoon was 14.2 percent lower.

Investors were also reacting to the results of a European Central Bank policy meeting, the last to be headed by the bank’s president, Jean-Claude Trichet, before he is replaced by Mario Draghi.

The central bank moved to help European banks that are having trouble raising short-term cash, while the Bank of England decided to resume its bond purchases to help support a slowing British economy. Both central banks left their key benchmark rates unchanged, at 1.5 percent for the euro area covered by the European Central Bank, and 0.5 percent for Britain.

In afternoon trading, the Euro Stoxx 50 index, a barometer of euro zone blue chips, rose 1.2 percent, while the FTSE 100 index in London rose 1.9 percent.

Investors were also encouraged by a report by the Institute for Supply Management on Wednesday that showed that non-manufacturing businesses continued to grow in September.

Longer term, however, the picture remains as murky as ever, and financial markets continue to face what strategists at HSBC, in their latest quarterly assessment, called “an unbearable degree of uncertainty.”

“After falling 22 percent from their April highs, global equities are likely to remain tricky,” Garry Evans, head of global equity strategy at HSBC in Hong Kong, wrote. “There are few signs of a bold solution to Europe’s sovereign debt issues, and the 23 November deadline for U.S. debt negotiations looms.”

Moreover, he added, economic growth prospects have not bottomed. Although the jury is still out on whether the world will actually tip into another recession, markets will continue to fret that it might, he said.

Asian shares rallied. The Tokyo benchmark Nikkei 225 stock average rose 1.7 percent. The Sydney market index S.P./ASX 200 rose 3.7 percent. In Hong Kong, the Hang Seng index rose 5.7 percent.

Global markets have been gyrating for months now, and with no sign that the European debt issues will be resolved any time soon, they are expected to remain volatile for the foreseeable future. The feeble state of the American economy and moderating expansion in growth engines like China and India also have compounded the global nervousness.

Crude oil futures for November delivery fell 0.2 percent to $79.51 a barrel. Comex gold futures slipped 0.1 percent to $1,638.50 an ounce.

The dollar was mixed against other major currencies. The euro rose to $1.3384 from $1.3348 late Wednesday in New York, while the British pound rose to $1.5481 from $1.5460. The dollar fell to 76.67 yen from 76.79 yen, but rose to 0.9239 Swiss francs from 0.9232 francs.

Yields on the government bonds that investors see as the safest assets rose, as money flowed into stocks. The yield on the 10-year United States Treasury rose 5 basis points to 1.93 percent, while the yield on the comparable German security rose 5 basis points to 1.88 percent.

David Jolly reported from Paris and Bettina Wassener from Hong Kong.

Article source: http://feeds.nytimes.com/click.phdo?i=bbd96b40082915b40303c82b7ffacf2b

Stocks & Bonds: Wall Street Recovers After Fresh Worries Shake European Markets

Markets have been subject to sharp swings in recent weeks, particularly as concerns over the sovereign debt crisis have grown. The latest slide in the currency and stock markets occurred Monday, set off by the resignation on Friday of Jürgen Stark, a top German official at the European Central Bank. His move highlighted policy discord in the bank.

It also aggravated concerns in the currency markets that Germany was preparing contingency plans for its banks in the event of a Greek default, Eric Viloria, senior market strategist for Forex.com, said.

Greek bonds showed record high yield spreads on Monday, while German bonds were at lows, Mr. Viloria noted.

“There are actually quite a bit of factors that are weighing on the euro today,” he said, adding that investors were avoiding assets they viewed as risky. “You are seeing some dollar strength, and that is highlighted by the yields.”

Analysts attributed the market movements on Monday to concerns from last week over Greece and fresh worries about the possibility of sovereign downgrades.

“This is not a problem resolved in an afternoon,” Peter Tuz, the president and portfolio manager at Chase Investment Counsel, said. “And it looks like things are going to get worse before they get better.”

Stocks on Wall Street veered from mixed to more than 1 percent lower, then made a late push to close higher.

The Standard Poor’s 500-stock index gained 8.04 points, or 0.70 percent, to close at 1,162.27. The Dow Jones industrial average added 68.99 points, or 0.63 percent, to close at 11,061.12, and the Nasdaq composite index rose 27.10 points, or 1.10 percent, to close at 2,495.09.

In Europe, the FTSE 100 in Britain dropped 1.6 percent and the Euro Stoxx 50 index of euro zone blue chips was off 3.8 percent. The DAX in Germany lost 2.3 percent, and the CAC 40 in France tumbled 4 percent despite fresh efforts by the French government and one of the hardest-hit banks, Société Générale, to calm nerves.

Asian markets slumped. The Nikkei 225 index closed down 2.3 percent, and the Hang Seng in Hong Kong fell 4.2 percent.

The euro finished at $1.36, after declining rapidly to $1.35 against the dollar, from $1.41 just over a week ago.

Interest rates rose slightly. The Treasury’s benchmark 10-year note fell 10/32, to 101 19/32, and the yield rose to 1.95 percent from 1.92 percent late Friday. Gold fell $46.50 to $1,809.90 an ounce.

In equity markets, the technology, financial and consumer discretionary sectors were all up more than 1 percent.

Bank of America and JPMorgan Chase were each up more than 1 percent, at $7.05 and $32.42, respectively. Wells Fargo rose more than 2 percent to $24.10.

But European financial institutions felt the brunt of the uncertainty on Monday. Moody’s Investors Services warned recently about the exposure of those banks to Greek sovereign debt, and the stock price of Société Générale and BNP Paribas fell as much as 12 percent as investors braced for a possible downgrade to their credit ratings.

While any downgrade was expected to be small, it would probably increase turmoil in financial markets.

Liz Alderman and Bettina Wassener contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=ad1c5e6ec2496f55786062b96a02f76d

Wall Street Recovers After Fresh Worries Shake European Markets

Markets have been subject to sharp swings in recent weeks, particularly as concerns over the sovereign debt crisis have grown. The latest slide in the currency and stock markets occurred Monday, set off by the resignation on Friday of Jürgen Stark, a top German official at the European Central Bank. His move highlighted policy discord in the bank.

It also aggravated concerns in the currency markets that Germany was preparing contingency plans for its banks in the event of a Greek default, Eric Viloria, senior market strategist for Forex.com, said.

Greek bonds showed record high yield spreads on Monday, while German bonds were at lows, Mr. Viloria noted.

“There are actually quite a bit of factors that are weighing on the euro today,” he said, adding that investors were avoiding assets they viewed as risky. “You are seeing some dollar strength, and that is highlighted by the yields.”

Analysts attributed the market movements on Monday to concerns from last week over Greece and fresh worries about the possibility of sovereign downgrades.

“This is not a problem resolved in an afternoon,” Peter Tuz, the president and portfolio manager at Chase Investment Counsel, said. “And it looks like things are going to get worse before they get better.”

Stocks on Wall Street veered from mixed to more than 1 percent lower, then made a late push to close higher.

The Standard Poor’s 500-stock index gained 8.04 points, or 0.70 percent, to close at 1,162.27. The Dow Jones industrial average added 68.99 points, or 0.63 percent, to close at 11,061.12, and the Nasdaq composite index rose 27.10 points, or 1.10 percent, to close at 2,495.09.

In Europe, the FTSE 100 in Britain dropped 1.6 percent and the Euro Stoxx 50 index of euro zone blue chips was off 3.8 percent. The DAX in Germany lost 2.3 percent, and the CAC 40 in France tumbled 4 percent despite fresh efforts by the French government and one of the hardest-hit banks, Société Générale, to calm nerves.

Asian markets slumped. The Nikkei 225 index closed down 2.3 percent, and the Hang Seng in Hong Kong fell 4.2 percent.

The euro finished at $1.36, after declining rapidly to $1.35 against the dollar, from $1.41 just over a week ago.

Interest rates rose slightly. The Treasury’s benchmark 10-year note fell 10/32, to 101 19/32, and the yield rose to 1.95 percent from 1.92 percent late Friday. Gold fell $46.50 to $1,809.90 an ounce.

In equity markets, the technology, financial and consumer discretionary sectors were all up more than 1 percent.

Bank of America and JPMorgan Chase were each up more than 1 percent, at $7.05 and $32.42, respectively. Wells Fargo rose more than 2 percent to $24.10.

But European financial institutions felt the brunt of the uncertainty on Monday. Moody’s Investors Services warned recently about the exposure of those banks to Greek sovereign debt, and the stock price of Société Générale and BNP Paribas fell as much as 12 percent as investors braced for a possible downgrade to their credit ratings.

While any downgrade was expected to be small, it would probably increase turmoil in financial markets.

Liz Alderman and Bettina Wassener contributed reporting.

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Fresh Worries About Europe Shake Global Stock Markets

The FTSE 100 in Britain sank 2.9 percent and the Euro Stoxx 50 index of euro-zone blue chips was off 4.7 percent. The DAX in Germany dropped over 4 percent, and the CAC 40 in France tumbled 5 percent by early afternoon despite a fresh volley of efforts by the French government and one of the hardest-hit banks, Société Générale, to calm nerves.

Stocks on Wall Street were expected to open lower. Dow futures were down 2 percent while Standard Poor’s 500 futures fell 2.3 percent. Asian markets also slumped. The Nikkei 225 index closed down 2.3 percent, and the Hang Seng in Hong Kong fell 4.2 percent.

The euro also continued to decline rapidly against the dollar, dipping below $1.35 from $1.41 just over a week ago. Rapid swings like this in currencies are worrisome because they make it hard for businesses to calculate their costs and re-price goods and services quickly in response.

Exporters in the United States especially can hardly afford to see the dollar strengthen sharply at a time when the economy is in danger of slipping back into recession.

Previewing the week, Carl Weinberg, the chief economist at High Frequency Economics in Valhalla, N.Y., declared markets to be “in destabilized mode.”

“What has to happen this week to make it better, we don’t know, because we’ve never seen this before,” he added.

Worries about the health of Europe’s banks have taken on outsized dimensions in recent weeks, contributing to significant volatility in stock markets worldwide. Investors have grown increasingly suspicious that Europe’s efforts to contain the crisis that began in Greece are unraveling.

The Greek finance minister, Evangelos Venizelos, warned over the weekend that the Greek economy would be likely to shrink 5.3 percent this year — a sharp downward revision from the previous forecast of a contraction of 3.8 percent. This would make it even more challenging for Greece, which has been at the center of the continent’s debt woes, to pay its debts.

The stock price of Société Générale and BNP Paribas, both globally interconnected French banks considered too big to fail, plunged up to 12 percent in early trading Monday as investors braced for a possible downgrade to their credit ratings. Moody’s Investor Services had recently warned about their exposure to Greek sovereign debt.

While any downgrade was expected to be small, it would likely fan further turmoil in financial markets, just as the Standard and Poor’s downgrade of the United States by one notch stoked greater volatility than originally anticipated.

Société Générale attempted to head off trouble Monday with a statement before markets opened, saying that it holds relatively little in the way of troubled government bonds from Greece, Ireland, Italy, Portugal or Spain.

The bank said that it was stepping up efforts to reduce costs and strengthen its balance sheet, and that it planned to free up €4 billion, or $5.4 billion, of capital by 2013 through the sale of assets.

The governor of France’s central bank, Christian Noyer, also sought to put out the flames on Monday. “No matter what the Greek scenario, and whatever measures must be passed, French banks have the means to face up to it,” he said in a statement.

That did little to placate the concerns. After trading at €40 in early July, the shares had slid to just above €15 Monday — a level that is considered a key psychological threshold. In what may be a self-fulfilling spiral, investors have been questioning why the shares would be trading so low if the bank is as healthy as its executives and the French government say it is.

The biggest banks in Europe, especially in France, hold billions of euros’ worth of Greek bonds, and investors fear that even a partial default by Greece would sharply diminish the value of those assets, eroding what are perceived to be already weak capital positions.

The latest slide in the currency and stock markets had been set off by the resignation of Jürgen Stark, a key German official at the European Central Bank, on Friday, which highlighted policy discord within the E.C.B.

A much-anticipated jobs program speech by President Barack Obama, meanwhile, had done little to lift the global malaise about the prospects for U.S. economic growth. The Dow Jones industrial average and the Standard and Poor’s 500 index both slumped 2.7 percent on Friday.

China, however, remains one of the world’s main engines of growth, although the pace is moderating, data released Monday showed.

Exports from China in August were up 24.5 percent from a year earlier and imports climbed 30.2 percent. Local banks extended nearly 580 billion renminbi, or $90.8 billion, in loans, in the same month, which was more than analysts had expected.

Bettina Wassener contributed reporting from Hong Kong.

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