March 28, 2024

Wall Street Declines Again

Stocks fell in choppy trading on Wall Street on Thursday following weak results from Wal-Mart Stores and rising tensions in the Middle East.

Shares also dipped on data from the Federal Reserve Bank of Philadelphia that showed business activity in mid-Atlantic states unexpectedly contracted. A regional gauge of manufacturing in New York State slowed for a fourth consecutive month in November but was stronger than expected.

The broad Standard Poor’s 500-stock index lost 0.2 percent by the close of trading, as did the Dow Jones industrial average. The Nasdaq composite index lost 0.4 percent.

“There’s nothing that suggests the economy is poised to free-fall or rally, and with all the uncertainty out there people are choosing to just take their 2012 gains now rather than December,” said John Norris, managing director of wealth management with Oakworth Capital Bank in Birmingham, Ala.

Still, the S.P. 500 was up 7.6 percent so far this year, though at its 2012 peak the benchmark index was up more than 17 percent.

Wal-Mart fell 3.7 percent after reporting third-quarter revenue that missed expectations. The company said economic conditions pressured customers’ spending. Target rose 1.7 percent after it reported a profit that beat expectations.

Weekly jobless claims climbed in the latest week, hurt by the impact of Hurricane Sandy, though consumer prices came in as expected with a 0.1 percent increase, the government reported. Claims totaled 439,000, over expectations of 375,000.

The Philadelphia Fed said its business activity index slumped to -10.7 points from 5.7 the month before, a much steeper fall than had been expected. The data was affected by disruption from Hurricane Sandy, which slammed the Northeast in late October.

Both the Dow and Nasdaq on Wednesday ended at their lowest levels since late June, while the S.P. 500 is down about 5 percent since election night. Wednesday marked the benchmark index’s lowest close since July 25.

Overseas, Israel launched a major offensive against Palestinian militants in Gaza. Egypt said it recalled its ambassador from Israel in response.

European stocks ended lower Thursday, with the FTSE 100 in London and the DAX in Frankfurt down 0.8 percent and the CAC 40 in Paris 0.5 percent lower.

Article source: http://www.nytimes.com/2012/11/16/business/daily-stock-market-activity.html?partner=rss&emc=rss

Rally Fades on Bank Profits

Stocks on Wall Street advanced Tuesday but pared gains after Citigroup’s steep drop in profit gave investors a reason to unload bank shares.

The late-day sell-off reflected a reversal in prevailing sentiment, when earlier optimism about the economy and China’s growth prospects drove the major stock indexes up about 1 percent.

The Dow Jones industrial average closed up 0.5 percent to 12,482.07, while the Standard Poor’s 500-stock index was up 0.4 percent, to 1,293.67 The Nasdaq composite index was up 0.6 percent to 2,728.08.

Across the Atlantic, the FTSE 100 in London added 0.7 percent.

The financial sector took a hit from investors’ disappointment with Citigroup’s earnings. Citigroup’s stock slid 8 percent to a session low at $28.16 after the bank reported weaker-than-expected earnings. The KBW Banks Index lost 1.4 percent.

Citigroup’s results followed similarly disappointing earnings on Friday from JPMorgan Chase.

“It was expected that some of the big banks would continue struggling, especially those heavily involved in investment banking, because that part of the financial system has clearly slowed down,” said Bryant Evans, investment adviser and portfolio manager at Cozad Asset Management in Champaign, Ill.

Earlier in the day, stocks rallied about 1 percent after data showed China’s economy expanded at the weakest pace in two and a half years, suggesting that officials may try to increase growth in the near term by tweaking monetary policy.

The news followed the widely expected announcement late Friday by Standard Poor’s that it was downgrading the credit ratings of nine euro zone countries.

Also Tuesday, Wells Fargo posted a 20 percent jump in quarterly profit. Wells Fargo’s stock, which earlier had risen to a session high at $30.69, pulled back sharply and was up just 0.7 percent at the close.

The Treasury’s 10-year note rose 4/32, to 101 9/32. The yield fell to 1.86 percent, from 1.87 percent late Friday.

Article source: http://feeds.nytimes.com/click.phdo?i=021b6dccdc47593b65badd6eb577e8d7

Stocks Rally on Positive Economic News

A mixed report on American bank profits did not erase investor enthusiasm Tuesday, as stocks rose around the world on strong economic data from China and Germany.

Citigroup reported an 11 percent drop in fourth-quarter earnings, well below the Wall Street consensus, and revenue fell 7 percent, underscoring the banking industry’s slump in investment banking and slow growth in lending. Wells Fargo profit rose 20 percent in the same period.

Earlier, China said its 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.

The Standard Poor’s 500-stock index rose 0.9 percent in afternoon trading in New York. The Dow Jones industrial average gained 1 percent and the Nasdaq composite index added 1.1 percent. Markets were closed Monday for the Martin Luther King holiday.

Across the Atlantic, the Euro Stoxx 50, an index of euro zone blue chips, rose 1.5 percent. The FTSE 100 in London added 0.7 percent.

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.

“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.

A successful debt sale in Spain also 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. on 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://feeds.nytimes.com/click.phdo?i=021b6dccdc47593b65badd6eb577e8d7

Stocks and Bonds: Trading Year Starts Off With a Rally

Wall Street stocks ushered in the first day of trading in the new year with a strong rally as investors were buoyed by a report that showed manufacturing strength in the American economy.

Historically, equities have often traded higher in the opening days of the new year. But after opening with a strong bounce Tuesday, stocks gave back some of their early gains as investors remained skeptical about the strength of the economy and saw a cloudy outlook for the euro zone.

“People are skittish. They’re saying, ‘Show me, show me, show me. Prove it to me, prove it to me, prove it to me,’ ” said Robert Doll, chief equity strategist for fundamental equities at asset-management firm BlackRock.

The Standard Poor’s 500-stock index gained 1.55 percent, or 19.46 points, to close at 1,277.06, after climbing to 1,284.62 in the morning.

The Nasdaq composite index rose 1.67 percent, or 43.57 points, to 2,648.72, and the Dow Jones industrial average increased 1.47 percent, or 179.82 points, to 12,397.38.

Meanwhile, oil prices shot up on growing concerns that Iran could close the Strait of Hormuz in the Persian Gulf to oil tankers if new sanctions are adopted by Western nations. The tensions in the region caused oil prices to jump $4.13, to $102.96 a barrel on the New York Mercantile Exchange.

In stocks, financial firms led the charge higher. Shares of Bank of America, which was one of the worst-performing stocks last year, had one of the biggest moves, rising 4.32 percent, to $5.80. JPMorgan Chase shares climbed 5.2 percent, to $34.98, and Citigroup’s stock jumped 7.68 percent, to $28.33.

Some analysts attributed the early optimism in the day to a new report on manufacturing. The Institute for Supply Management, a trade group of purchasing managers, said its manufacturing index rose to 53.9 points in December from 52.7 in November. Readings above 50 indicate expansion.

Despite the stronger tenor of the report, other analysts remained cautious about drawing broader conclusions.

“The investor base got badly burned this time last year when many who were pessimistic in late 2010 switched to being optimistic in early 2011,” said Cary Leahey, senior economist at Decision Economics.

Investors raised their forecasts for economic growth and “upped their expectations of corporate earnings — and equity performance peaked in the second quarter and growth turned out to be about half of what people had hoped,” Mr. Leahey said.

Joseph Saluzzi, a co-head of trading at Themis Trading, said it was too early to say investors had a new, buoyant resolve. Fairly low trading volumes early in the day did not indicate to him that a flood of sidelined cash was moving into the markets.

“Nothing is really going to change until you start to see some real hard economic numbers that show growth. We’ve seen these sort of inklings before and they haven’t led to much in the past,” Mr. Saluzzi said.

More economic data will be released later in the week, perhaps providing investors with a bit of additional clarity on the strength of the economy late last year. Major retailers are scheduled to release sales data, which will provide a gauge of consumer spending during the holiday season.

And on Friday, the government reports the closely watched employment figures for December. The early consensus in the market was that the economy generated 150,000 jobs during the month. But even if true, some analysts said the market’s reaction could be muted.

“The market is primed for a good report by recent standards, but it will be a mediocre report by historical standards,” said Mr. Leahey.

Forecasts for much of the euro zone this year appear more bleak.

Chancellor Angela Merkel of Germany warned on New Year’s Eve that “next year will no doubt be more difficult than 2011,” as austerity measures across much of Europe put economic growth at risk.

Mr. Doll of BlackRock said most investors believe Europe is going to have a shallow recession and that, should it occur, would not lead to significant fallout for the United States economy.

“But things will be different if somebody can convince us that Europe is going to fall apart or we see the bankruptcy of a major bank there,” he said. “Then that’s not economic contagion, which we could thwart, but financial contagion, which would be much more difficult to deal with.”

Earlier Tuesday, Asian stocks rose. The Hang Seng Index in Hong Kong, on its first trading session of 2012, jumped 2.4 percent and the Kospi index in South Korea rose 2.69 percent. Markets in Japan and mainland China remained closed for the extended New Year’s holiday.

The Treasury’s 10-year note fell 23/32, to 100 13/32, and its yield rose to 1.96 percent, from 1.88 percent late Friday.

Article source: http://feeds.nytimes.com/click.phdo?i=9d6867a2d23baa42b10f2c07cd88c4f5

U.S. Stocks Rally on Manufacturing Growth

Wall Street stocks rocketed higher on Tuesday, the first day of trading in the new year, fueled by a report that showed manufacturing strength in the American economy.

But traders and others noted that volumes were thin and that many wary investors remain sidelined, awaiting further direction from the euro zone or seeking clarity on the strength of the domestic economy.

And like last year, the myriad challenges facing the euro zone remained front and center for many investors, as leaders there warned of more trouble and turbulence ahead.

The Dow Jones industrial average closed with a jump of 180 points – a 1.5 percent gain. Earlier in the session, the Dow had soared by more than 2 percent.

Likewise, the Standard Poor’s 500-stock index gained 1.5 percent, and the Nasdaq composite index closed up 1.7 percent.

In a rare turn, Bank of America’s stock, which was hammered by investors for most of last year, was one of the strongest performers of the day. Its stock climbed 6 percent to $5.86, while Citigroup was up 8 percent to $28.46.

Some analysts pointed to a new report on American manufacturing as buoying investors’ spirits. The Institute for Supply Management, a trade group of purchasing managers, said its manufacturing index rose to 53.9 points in December from 52.7 in November. Readings above 50 indicate expansion.

Despite the stronger tenor of the report, other analysts remained cautious about drawing broader conclusions.

“The investor base got badly burned this time last year when many who were pessimistic in late 2010 switched to being optimistic in early 2011,” said Cary Leahey, senior economist at Decision Economics.

Investors raised their forecasts for economic growth and “upped their expectations of corporate earnings — and equity performance peaked in the second quarter and growth turned out to be about half of what people had hoped,” Mr. Leahey said.

Joseph Saluzzi, a co-head of trading at Themis Trading, said he didn’t feel the early move up in the session signaled a new, buoyant resolve among investors and that the relatively low trading volumes didn’t indicate a flood of sidelined cash moving into the markets.

“Nothing is really going to change until you start to see some real hard economic numbers that show growth. We’ve seen these sort of inklings before and they haven’t led to much in the past,” Mr. Saluzzi said.

Later in the week, more economic data will be released that investors hope will start to bring a bit more clarity to how strong the economy was running late last year.

Major retailers will release sales data, which will provide some gauge of consumer spending during the holiday season. And on Friday, the closely watched American employment figures for December will be released.

The early consensus in the market was that the economy generated another 150,000 jobs during the month. But even if true, some analysts said the market’s reaction could be muted.

“The market is primed for a good report by recent standards, but it will be a mediocre report by historical standards,” said Mr. Leahey.

Forecasts for much of the euro zone this year appear more bleak.

Chancellor Angela Merkel of Germany warned on New Year’s Eve that “next year will no doubt be more difficult than 2011,” as austerity measures across much of Europe put economic growth at risk.

Earlier Tuesday, Asian stocks rose. Hong Kong’s Hang Seng Index, on its first trading session of 2012, jumped 2.4 percent, South Korea’s Kospi index rose 2.7 percent and Australia’s S.P. ASX 200 gained 1.1 percent. Markets in Japan and mainland China remained closed for the extended New Year’s holiday.

Oil prices followed equities higher. Benchmark crude for February delivery rose $4.25 to $103.07 a barrel  on the New York Mercantile Exchange.

Article source: http://feeds.nytimes.com/click.phdo?i=9d6867a2d23baa42b10f2c07cd88c4f5

Banking Worries Send Stocks Lower in U.S.

Asian indexes were lower after the news of the death of the North Korean leader, Kim Jong-il, raised concerns about regional stability.

Trading on Wall Street had opened higher but then turned negative in late morning. Analysts said that market moves were expected to be exaggerated, with lighter volumes in a holiday week.

During the day, some focus shifted to European sovereign debt troubles as the president of the E.C.B., Mario Draghi, forecast a difficult year for banks. Comments by Mr. Draghi in The Financial Times that dimmed the prospect of large-scale government bond purchases by the central bank — as well as a report in The Wall Street Journal that the Federal Reserve would rebuff pressure from American banks and go along with international recommendations on capital levels for banks — also affected the markets, analysts said.

“That kind of set a little bit of a negative tone,” said Brad Sorensen, an analyst for the Schwab Center for Financial Research. “For financials, the higher capital requirements mean they have less money to make money with. In an already tough environment, it gets a little bit more difficult.”

He added, “Any time there is some uncertainty there, that kind of frightens the market a little bit.”

The Dow Jones industrial average closed off 100.13 points, or 0.8 percent, at 11,766.26. The Standard Poor’s 500-stock index was down 1.2 percent, and the Nasdaq composite index fell 1.3 percent.

Bank of America dropped to $4.99, a decline of more than 4 percent. Morgan Stanley was down 5.5 percent, to $14.16.

While Mr. Draghi warned of a difficult year for banks, credit crunches are already visible in some countries like Ireland, Vitor Constâncio, the vice president of the E.C.B., told reporters in Europe on Monday. Meanwhile, slower economic growth is likely to lead to an increase in bad loans, which will further weaken lenders.

Keith B. Hembre, the chief economist and chief investment strategist at Nuveen Asset Management, said it was difficult to tie the day’s market movements to what was going on in Europe but said there was “overarching concern in my view” considering that there had been strong demand for the E.C.B. funding program, suggesting that banks margins could be pinched.

“Just in terms of the market performance today it is a little similar to Friday, when you have a pop at the open and then lost ground,” Mr. Hembre said. “There is somewhat of a European influence in that. It is not like there is any real dominant news story.”

Stocks had a choppy day on most major European exchanges, falling early, then rebounding in midsession before ending mixed. The Euro Stoxx 50 closed slightly higher, or about a quarter of a point. The index in Paris, the CAC 40, was up less than 0.1 percent, while the German DAX was down 0.5 percent. The FTSE 100 index in London was down 0.4 percent.

United States bonds were down 4 basis points to 1.81 percent in yield. German government bonds, which along with the United States Treasuries are considered to be among the most secure investments in the world, were little changed, suggesting investors were calm after the shock of the Korean news wore off. They closed up 3 basis points to 1.875.

The dollar gained against other major currencies. The euro fell to $1.3017 from $1.3046 late Friday in New York.

In Asia, the Tokyo benchmark Nikkei 225 stock average fell 1.3 percent. The Sydney market index S.P./ASX 200 fell 2.4 percent. In Hong Kong, the Hang Seng index fell 1.2 percent and in Shanghai the composite index fell 0.3 percent.

David Jolly and Jack Ewing contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=ec64c155f1389d0b1c3e97af419272ae

Stocks Jump on Wall Street and in Europe

The surge in equities was a welcome change of direction from last week, when Wall Street lost more than 4 percent as markets reacted to rising borrowing costs for European governments and the failure by a Congressional committee in Washington to cut the budget deficit.

On Monday, investors took note that Germany and France have been discussing a deal to fast-track European budget and financial coordination. Analysts said that a deal that does not require renegotiating European Union treaties could reassure markets and bring skeptics on board to support the beleaguered euro.

 “We are seeing slightly better news out of Europe,” said Kate Warne, an investment strategist for Edward Jones. With last week’s oversold conditions, she added, “not surprisingly, there are a lot of attractive opportunities.”

With less than two hours left in the trading session, the Dow Jones industrial average of 30 blue-chip stocks zoomed ahead 2.7 percent. The Standard Poor’s 500-stock index, a wider gauge of market activity, jumped 2.9 percent, and the Nasdaq composite index leaped 3.4 percent.

There were reasons to be guarded about the significance of one day of gains, however strong. Monday’s surge had not pushed any of the major indexes into positive territory for the month or for the year.

It could also be a symptom of rising market volatility. The S.P. 500, for example, has closed up at least 4 percent eight times since the beginning of 2009, as the financial crisis set in, while it has fallen by 4 percent or more 10 times in that period.

Howard Silverblatt, senior index analyst for Standard Poor’s, said a high proportion of the index’s big swings have, in fact, occurred just since 2009: Of 164 times the index has moved by at least 4 percent since 1962, 26 have been in the last three years.

In Europe, stocks closed even higher. The Euro Stoxx 50 index, a barometer of euro zone blue chips, rose more than 5 percent. The CAC 40 in Paris was up 5.5 percent and the DAX, the German index, rose 4.6 percent. The FTSE 100 index in London gained 2.9 percent.

The bond market reflected investors’ growing risk appetite, with the securities usually considered safest falling in price. That meant yields on the United States 10-year Treasury rose 3 basis points to 2.95 percent. The comparable German bond rose 4 basis points to yield 2.29 percent. A basis point is one-hundredth of a percent.

Bonds of countries that have been seen as more risky rose in price. Italian 10-year bonds traded to yield 7.191 percent, down 4 basis points. Spanish 10-years were down 13 basis points at 6.50 percent.

“Talk that European countries were discussing bilateral treaties to strengthen fiscal ties across the current monetary union seems to be easing tensions somewhat this morning, and driving a sizable sell-off in the U.S. rates markets,” wrote Guy LeBas, the chief fixed-income strategist for Janney Montgomery Scott, in a research note.

Rumors of preparations for an International Monetary Fund bailout of Italy — even though quickly denied by the fund — also contributed to a sense that official efforts to stabilize the euro were progressing.

Alessandro Frigerio, a fund manager at R.M.J. Sgr in Milan, said he had been “almost certain” that the market would rally before Dec. 9, when European leaders hold a summit meeting to discuss the sovereign debt crisis.

“The market had been selling off for weeks on all the talk and rumors,” he said. “Now, we’re going to start getting some facts,” including more detail on the European Financial Stability Facility, the primary euro zone bailout vehicle, and Italy’s plans to pay down its debt.

“I don’t know how the market will react after it gets the facts, though,” he said. “We’ll see when we get them.”

Investors seemed to shrug off dire warnings from the Organization for Economic Cooperation and Development and from Moody’s Investors Service, both of which warned that the euro zone problems were well on their way to becoming serious issues for non-euro countries.

They also ignored another dismal debt offering in Italy, where the Treasury needed to pay 7.20 percent to sell 12-year bonds, 2.7 percentage points above what it paid at a similar auction in October.

Earlier in Asia, stocks rose modestly.

Markets also took a measure of optimism from the National Retail Federation, which said Sunday that spending in the United States per shopper over the Thanksgiving weekend surged 9.1 percent over last year — the biggest increase since 2006 — to an average of almost $400 a customer.

On Wall Street, consumer stocks were up about 3 percent, while energy stocks were up more than 3.5 percent as oil prices rose, with Brent crude topping $100 a barrel. The dollar was lower against most other major currencies. The euro rose to $1.3336 from $1.3239 late Friday in New York.

Bettina Wassener contributed from Hong Kong.

Article source: http://www.nytimes.com/2011/11/29/business/global/daily-stock-market-activity.html?partner=rss&emc=rss

Wall St. Slides on Pessimism About Deficit Deal

A bipartisan panel in Washington was expected to announce that its divisions were too great to settle on a plan to cut $1.2 trillion from government spending over 10 years, setting the stage for the “automatic” implementation of spending cuts in 2013.

“Fitch has warned that it will downgrade Uncle Sam’s AAA-rating if there is no agreement,” Holger Schmieding, an economist with Berenberg Bank in London, wrote in a note. “This sounds eerily familiar to the turmoil in late July and early August (U.S. debt ceiling debate, S.P. downgrade), just ahead of the big drop in European equity prices in August.”

The Standard Poor’s 500-stock index, a broad measure of the market, fell 2.6 percent to 1,184.13 in morning trading. The Dow Jones industrial average was off 2.9 percent, or 338 points, and the Nasdaq composite index lost 2.7 percent.

“The market has been spooked over Europe and they are still not convinced that Europe is going to be able to pull out of this,” said Peter Cardillo, chief market economist for Rockwell Global Capital. “This is all weighing on the market.”

French and euro zone markets also fell as Moody’s highlighted the peril to France’s finances.

In afternoon trading, the Euro Stoxx 50 index, a barometer of blue chips, fell 2.6 percent, while the FTSE 100 index in London fell 2.1 percent. The CAC 40 in France and the Germany DAX were each down by 2.7 percent.

Moody’s warned in October that it might begin a review of France’s AAA rating, which is considered the most fragile of the top-rated European governments, if growing bailout costs threatened to overstretch its finances.

Losing its gilded status as a AAA-rated borrower would mean France’s borrowing costs would rise and would weigh on credit rating of the euro zone bailout fund, the European Financial Stability Facility. Standard Poor’s had already put a scare into French officials this month, erroneously sending an e-mail on Nov. 10 suggesting that it had lowered the rating on France’s sovereign debt.

“Elevated borrowing costs persisting for an extended period would amplify the fiscal challenges the French government faces amid a deteriorating growth outlook, with negative credit implications,” Alexander Kockerbeck, a Moody’s analyst, wrote in a weekly report, noting that weak economic growth would further weigh on the country’s efforts to control its spending.

The growing risk of a European recession also weighed on markets. The Bundesbank, the German central bank, on Monday revised down its 2012 growth forecast to 0.5 percent to 1 percent, down from the 1.8 percent growth in gross domestic product it had forecast in June. The European Commission this month cut its growth forecast for the 17 euro zone nations to 0.5 percent in 2012.

In the bond market, the yield on United States 10-year Treasury securities fell 6 basis points to 1.95 percent, while comparable German sovereign debt yielded 1.87 percent, down 9 basis points. A basis point is one-hundredth of a percent.

Spanish 10-year yields ticked up 21 basis points to 6.519 percent, while Italian 10-years traded to yield 6.652 percent, up 3 basis points. French 10-year bonds, a growing focus of market attention, were trading 2 basis points lower, at 3.43 percent.

The spreads between the French, Italian and Spanish yields, on the one hand, and the German yields, the European benchmark, on the other, have grown sharply this year, signaling market distrust of the bonds of euro zone members once thought to be safe.

United States crude oil futures fell 1.4 percent to $96.30 a barrel. Comex gold futures were down 1 percent at $ $1,705.5 an ounce.

The dollar rose against major European currencies. The euro slid to $1.3472 from $1.3524 late Friday in New York.

Asian shares fell. The Tokyo benchmark Nikkei 225-stock average fell 0.3 percent. The Sydney market index S.P./ASX 200 fell 0.3 percent. The Hang Seng index fell 1.4 percent Hong Kong while the composite index did the same in Shanghai.

This article has been revised to reflect the following correction:

Correction: November 21, 2011

An earlier version of this article misspelled the name of Berenberg Bank. 

 

Article source: http://www.nytimes.com/2011/11/22/business/global/daily-stock-market-activity.html?partner=rss&emc=rss

Stocks Are Mixed as Investors Weigh Next Move in Europe

Stocks were mixed on Wall Street and in Europe on Friday after the new head of the European Central Bank dashed hopes that he would act to ease the euro debt crisis.

Mario Draghi, the president of the central bank, told a gathering of bankers in Frankfurt that European leaders — who, with the notable exception of Germany, have been calling for the bank to use its printing press to help embattled governments — are themselves the problem, taking too long to implement crisis measures they agreed to months or even years earlier.

“Where is the implementation of these long-standing decisions?” he said. “National economic policies are equally responsible for restoring and maintaining financial stability.”

In New York, the Dow Jones industrial average rose 0.4 percent, and the broader Standard Poor’s 500-stock index was up 0.3 percent in morning trading. The technology-heavy Nasdaq composite index was down 0.2 percent.

In late-afternoon trading in Europe, the Euro Stoxx 50 index, a barometer of euro zone blue chips, was down 0.3 percent, while the FTSE 100 index in London was 1.1 percent lower. The euro rose to $1.3528 from $1.3458 late Thursday in New York.

Asian shares closed lower across the board.

European bank shares fell modestly amid concerns about tighter funding. The United States Federal Reserve said Thursday that the European Central Bank had drawn down $895 million of liquidity swaps in the week through Wednesday. The swap lines are designed to increase market liquidity both in the United States and overseas “by providing foreign central banks with the capacity to deliver U.S. dollar funding to institutions in their jurisdictions during times of market stress,” the Fed says on its Web site.

Since the summer, American and other investors have reduced their short-term dollar funding for euro zone banks, leaving the banks with a need for alternative sources of dollars.

Investors’ attention remained focused on the European bond market, where Spanish, Italian and French government debt has in recent days been trading at levels that show the euro zone contagion spreading to the “core” of the currency union.

Spanish 10-year bonds fell back to trade at 6.34 percent, while Italian bonds dipped to 6.66 percent — still nearly 5 percentage points above the yield on comparable German debt, the euro zone’s safest bet. French 10-years were trading to yield 3.52 percent.

The market pressure on Spain comes with a general election looming on Sunday. Voters are expected to return the conservative Popular Party to power, after almost eight years of Socialist government under José Luis Rodríguez Zapatero. The prospect of such a change, however, seems to have done little to alleviate concerns among investors, similar to the muted reaction to recent government changes in Greece and Italy.

Instead, analysts were concerned about how quickly a new government in Madrid would be able to announce and start implementing further cuts and other austerity measures, given that it will take about a month for an anticipated center-right administration to take officially the helm.

David Jolly reported from Paris and Raphael Minder reported from Madrid. Jack Ewing contributed reporting from Frankfurt.

Article source: http://www.nytimes.com/2011/11/19/business/global/daily-stock-market-activity.html?partner=rss&emc=rss

Stocks and Bonds: Wall Street Closes Sharply Lower

Shares in every major sector spiraled downward on Monday as the market dropped to its lowest point in over a year amid anxiety over the European debt crisis and the struggling United States economy.

The nation’s biggest banks were once again hard hit, with Citigroup and Bank of America plunging almost 10 percent while shares of regional and community banks also plummeted. American Airlines fell by almost a third to just below $2 on speculation that it could declare bankruptcy.

The sharp sell-off brought Wall Street to the edge of a bear market — generally a fall of 20 percent from a recent high — as the Standard Poor’s 500-stock index showed a 19.4 percent decline since its April 29 high. That, in turn, could unleash yet another wave of negative news that could scare investors and push stocks even lower.

“People are really panicked, so any more incremental news in that direction, bad headlines if you will, are certainly things that may spur momentum to the downside,” said Jeffrey Kleintop, chief market strategist for LPL Financial.

On Monday, the S. P. 500 fell 2.85 percent, or 32.19 points to 1,099.23. The Dow Jones industrial average was off 258.08 points, or 2.36 percent, to close at 10,655.30. The Nasdaq composite index dropped 3.29 percent. Major stock markets in Europe and Japan also closed lower.

Seeking safer assets, investors flocked to Treasury bonds. Yields on the benchmark 10-year note fell to 1.75 percent from 1.92 percent late Friday. Fears that the problems in Europe might spread across the Atlantic and push an extremely fragile economy back into a recession have been looming for more than a year. With the job market still weak and the confidence of businesses and consumers in tatters, investors seem to be lurching from one piece of bad news to another.

Through the summer, for every big gain in stocks there were twice as many big losses, with 13 days of drops of 2 percent or more compared with seven days of gains of at least 2 percent. The rises were often driven by hopes that the European debt crisis could be contained, but then were wiped out by fears of cascading defaults and bank runs, and no real solution to too much debt and too little growth in Europe.

Even glimmers of hope, like reports on Monday showing stronger-than-expected manufacturing and construction data, were overshadowed by the unknowns about what will happen in Europe.

“That uncertainty has the markets completely shell-shocked, in jitters,” said Nariman Behravesh of IHS Global Insight.

In Europe, stock markets closed lower as finance ministers from the euro zone countries met Monday to try to approve a new installment of aid to Greece. But tension over the country’s inability to impose tough structural changes has stalled the talks, and no decision is expected this week.

Investors are also awaiting a meeting of the European Central Bank on Thursday, and many expect the bank to cut interest rates. Analysts say such action could push the euro lower and perhaps stave off a sharper decline in growth.

But fears about European contagion again weighed heavily on the major American banks, whose shares have fallen more than 35 percent this year.

“It’s just painful. Every day seems like it is the worst,” said Frederick Cannon, the chief equity strategist at Keefe, Bruyette Woods in New York. “As long as U.S. financials are tied to the comings and goings of Europe, it is going to be a roller-coaster ride without an end to it.”

Wall Street firms were pounded as investors worried that they may have large, indirect exposures to the Continent’s fiscal troubles because of the business they do with major European companies and banks. On Monday, Morgan Stanley’s shares fell almost 8 percent after plunging more than 10 percent on Friday. Shares of Goldman Sachs fell almost 5 percent Monday.

In another sign of investor fears, credit-default swaps on bonds backed by both Morgan Stanley and Goldman Sachs surged on Monday to their highest levels since the 2008 financial crisis. According to Markit, a credit derivatives data provider, investors are now paying $558,000 to insure against the risk that $10 million of Morgan Stanley bonds might default. They are paying $348,000 for similar protection for Goldman Sachs debt.

More domestically focused banks were not spared. Amid the onslaught of bad economic news — and fears of another weak jobs report on Friday — investors were dubious about the financial industry’s ability to improve revenue. They are also concerned that Federal Reserve policy measures to keep interest rates near zero for the next two yeas will ravage their results. Even generally well-run institutions — like JPMorgan Chase, Bank of New York Mellon, PNC Financial, U.S. Bancorp and Wells Fargo — fell 3 to 5 percent.

Airline stocks were also battered on Monday amid concerns consumers and businesses will cut back on travel spending in a deeper downturn. Traders started circling AMR, the parent company of American Airlines, because of rumors that it may be headed for bankruptcy.

An analyst report noted that an unusually large number of pilots have retired in recent months, contributing to AMR’s price drop of more than 33 percent, to $1.98. Shares of Delta Air Lines and United Continental Holdings fell about 11 percent. The U.S. Airways Group stocks sank almost 16 percent.

David Jolly, Stephen Castle and Bettina Wassener contributed reporting.

This article has been revised to reflect the following correction:

Correction: October 3, 2011

Because of an editing error, an earlier version of this article misstated the price of oil. It is trading slightly above $77, not $777.

Article source: http://feeds.nytimes.com/click.phdo?i=553fda21528c7ff61d8cc188e6aa70b4