January 20, 2022

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 Street Gains Push Dow Up for the Year

On the last day of one of the most tumultuous months for equities this year, the only dip in stocks came from the telecommunications sector, which was dragged down nearly 3 percent by shares of ATT after the news broke that the United States Justice Department would seek to block its proposed acquisition of T-Mobile USA.

Otherwise, new data on factory orders and jobs set investors up for a higher trading session that carried over gains from markets in Asia and Europe. The markets finished higher on Tuesday, despite reports on consumer confidence and housing that showed a mixed economic recovery.

On Wednesday, the three main indexes were more than 1 percent higher in the first hour of trading, although their gains were soon tempered by the news of government efforts to block ATT’s $39 billion acquisition of T-Mobile, which would create the largest carrier in the country.

In early afternoon trading, ATT shares dipped more than 4 percent, dragging down the overall telecom sector by about 1.5 percent. A rival, Sprint Nextel, was up by more than 7 percent and was the most widely traded share in that sector.

The news about ATT came at the end of a month characterized by high volatility, as choppy economic data renewed discussions about whether the economy was headed for another recession. Concerns about euro zone debt problems and fiscal uncertainty in the United States were among the factors adding to the rough trading.

Wild swings of hundreds of points have set back the three main indexes 3 to 5 percent in the month to date. But on Wednesday, the Dow gained enough ground to turn positive for the year, and in the early afternoon was up 86.96 points, or 0.8 percent, to 11,646.91. The Standard Poor’s 500-stock index, up almost 0.9 percent, and the Nasdaq composite index, up 0.5 percent, were still negative for the year through August, however.

The gains were played out in a market that has been oversold in the past month, said Anthony G. Valeri, a senior vice president and market strategist for LPL Financial.

“It was due for a bounce,” he said of Wednesday’s trading. Whether the gains can be sustained, though, “depends on data and events out of Europe,” Mr. Valeri said.

On Wednesday, a report from the United States Commerce Department showed that factory orders for July rose sharply, at 2.4 percent the largest increase since March. Demand for automobiles and commercial airplane orders propelled the orders.

A report on jobs on Wednesday, this one from ADP Employer Services, showed new jobs on private payrolls totaled 91,000 for August, below forecasts.

Those reports were released ahead of one of the most closely watched data releases the Labor Department’s national report on the job situation on Friday. Analysts were forecasting 70,000 in new nonfarm payroll jobs for August, compared with 117,000 the previous month, while the unemployment rate of 9.1 percent was not expected to change, according to a survey by Bloomberg News. “We are still not seeing job losses, which is what you would see in a recession,” Mr. Valeri said.

Goldman Sachs economists said in a research report that the A.D.P. report, which is used to help estimate the outcome of the national report, could mean lower forecasts for Friday’s numbers.A Federal Reserve report this week that said policy makers earlier this month considered changing the size or composition of the Fed’s balance sheet and reducing the interest rate paid on banks’ excess reserve balances has refocused investors’ attention on the Fed’s next meeting in September. Fed policy makers have agreed to consider other options at that meeting. But some analysts said the Fed might need more information before deciding on further stimulus.

“I think the Fed will want to see more data to prove inflation is stabilizing and the economy might be weaker than expected,” said Mr. Valeri.

The yield on the Treasury’s benchmark 10-year note was little changed at 2.195 percent.

Crude futures for October traded in New York were up 46 cents, or 0.5 percent, to $89.36 a barrel. Gold on the Comex was up 0.4 percent at $1,834 an ounce.

In Europe, Britain’s FTSE 100 and Germany’s DAX each gained 2.4 percent. In Paris, the CAC 40 rose 3.1 percent. Asia closed broadly higher.

Article source: http://feeds.nytimes.com/click.phdo?i=ed77311c76998c66dd157a38b2cfbb21

Stocks End Week With New Losses Worldwide

Turmoil swept through Asian and European markets and then carried over into the United States, where the broader market wavered between gains and losses on Friday before closing down more than 4 percent for the week.

Concerns lingered on Friday about the economy and about the euro zone’s debt troubles, much as they had in previous weeks. But some of the downturn on Wall Street was attributed to technical reasons. Friday, for example, was a day when options contracts expire, an event that can fuel volatility or market moves.

Analysts were also quick to point out that on a day before a summer weekend, low volumes could unfold into a “bleed” toward the end of the trading session — and indeed, what had been a relatively placid trading session in New York turned downward in the final hours.

“Just as importantly, any important policy makers that can come up with anything constructive are on vacation,” said Seth Setrakian, co-head of United States equities at First New York. “So what good news can come over the weekend?”

“So everyone is playing much lighter and much tighter,” he said. “It is very simply the data that has been coming out economically has not been constructive.” At the close, the Standard Poor’s 500-stock index was down 17.12 points, or about 1.5 percent, at 1,123.53. The Dow Jones industrial average was down 172.93 points, or 1.6 percent, at 10,817.65. The Nasdaq was down 38.59 points, or 1.6 percent, to 2,341.84.

The three indexes closed lower for the week. The S.P. was down 4.6 percent, the Dow fell 4 percent and the Nasdaq slid 6.6 percent in the five-day trading period. The steepest declines were on Thursday, when the indexes slipped as much as 5 percent on persistent worries about the economy and Europe’s debt problems. Stocks of companies most susceptible to slow growth and those related to banks have been hit. Technology, financials, and industrials were among the sectors down more than 1 percent on Friday.

“You are still seeing a lot of the economically sensitive names leading us on the way down,” Mr. Setrakian said.

Europe’s major stock indexes ended the day lower. The FTSE 100 in London fell 1 percent and the Euro Stoxx 50, a  barometer of European blue-chip stocks, pulled back 2.2 percent. Asian markets were also firmly down.

On Friday, gold continued the sharp ascent it has seen over the last months, demonstrating that nervousness remained intense. Gold futures for August delivery settled at $1,851.50 an ounce, up $32.60.

The Nikkei 225 index in Japan closed down 2.5 percent, and the major market indexes in Singapore and Hong Kong closed down more than 3 percent.

The losses during the day reflected an accumulation of bad news, including feeble economic data in the United States and Europe and signs that some banks were having trouble borrowing on the interbank market. Tension on money markets, which some analysts said was overblown, awoke unpleasant memories of the seizure in interbank lending that followed the collapse of Lehman Brothers in 2008.

“Everybody is taking risk off the table,” said George Rusnak, national director of fixed income for Wells Fargo. “This is probably going to be a trend over the next several weeks. There is not a lot of robust trading going on right now.”

Mr. Rusnak and other analysts again noted that concerns have mounted related to the banking sector, especially with respect to the exposure of American banks to European counterparts.

One drag on the American markets, and specifically the tech sector, on Friday was Hewlett-Packard, which is considering plans to spin off the company’s personal computer business into a separate company and is spending $10 billion on Autonomy, a business software maker. It fell 20 percent, to $23.60.

The benchmark 10-year Treasury bond yields, staying in the same range all day, was virtually unchanged at 2.062 percent.

It had touched record lows below 2 percent in intraday trading on Thursday.

“The growth outlook being hurt in Europe, and the ongoing sluggish data we have seen in the United States is the underlying issue the stock market is trying to grapple with,” Robert S. Tipp, a managing director and chief investment strategist for Prudential Fixed Income, said.

He said the crisis of confidence was evident as investors parked money in cash and into short-term fixed-income assets.

One thing to worry about next week will be whether the European Central Bank can continue to hold down yields on Italian and Spanish bonds. If not, Italian and Spanish borrowing costs might reach the point where they became too expensive, raising the risk of default.

On Friday, Italian bonds and Spanish bonds dipped to 4.96 percent.

Jack Ewing, Julia Werdigier, Bettina Wassener and Hiroko Tabuchi contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=eb345903023dd1892e4439a7b79a7fb1

U.S. Shares Waver After Drops in Asia and Europe

On Friday, after steep declines in Asia and Europe, the trend carried over to Wall Street, where stocks opened with further losses. But as the trading session wore on, the markets found some footing, wavering between gains and losses but avoiding the extremes often seen in recent weeks.

Analysts were quick to point out that on a day before a summer weekend low volumes could unfold into a bumpy and unpredictable trading session.

“I think it is this wrestling match between the fear and paranoia that drove the market yesterday, and people realizing stocks are really cheap here and bargain hunting,” Uri Landesman, president of Platinum Partners, said.

With deep concerns about the euro zone and global economic growth overshadowing the financial markets, it is not at all clear whether any gains will stick throughout the trading session.

“There are definitely solid arguments on both sides,” Mr. Landesman said. “We could have two or three directional swings by the end of the day.”At noon, the Standard Poor’s 500-stock index, which lost 4.5 percent on Thursday, was about even for the day. The Dow Jones industrial average was down 20 points, or 0.2 percent.

Europe’s major stock indexes ended the day lower. The Euro Stoxx 50 index was off 2.1 percent. The FTSE 100 in London was down 1 percent and the CAC 40 in Paris was down nearly 2 percent. Banks were among the biggest losers once again.

Asia, which had missed the worst of the selling Thursday, suffered painful losses on Friday. The Nikkei 225 index in Japan closed down 2.5 percent, and the key market indices in Singapore and Hong Kong closed down more than 3 percent.

The losses reflected an accumulation of bad news, including feeble economic data in the United States and Europe and signs that some banks were having trouble borrowing on the interbank market. Tension on money markets, which some analysts said was overblown, awoke unpleasant memories of the seizure in interbank lending that followed the collapse of Lehman Brothers in 2008.

“It is specifically risk on, risk off,” said George Rusnak, national director of fixed income for Wells Fargo. “Everybody is taking risk off the table.”

“This is probably going to be a trend over the next several weeks,” he said. “There is not a lot of robust trading going on right now.”

Mr. Rusnak and other analysts again noted that concerns have mounted related to the banking sector, especially with respect to the exposure of American banks to European counterparts.

“Really what it boils down to is ripple effects,” Mr. Rusnak said.

One drag on the American markets on Friday was Hewlett-Packard, which is considering plans to spin off the company’s personal computer business into a separate company and spending $10 billion on Autonomy, a business software maker. It fell more than 20 percent, as the most actively traded share at midday on the technology index, dragging it down nearly 1 percent.

The benchmark 10-year Treasury bond yields crept up to 2.08 percent, compared with 2.06 percent late Thursday, when it touched record lows below 2 percent during the day.

Robert S. Tipp, a managing director and chief investment strategist for Prudential Fixed Income, said global growth concerns and those related to euro zone fiscal health and recent bailouts were undercurrents in the markets.

“Clearly the markets remain on edge not only about the U.S. growth outlook but with the continued tensions among the various parties to the Greek deal,” he said, referring to the recent rescue package for Greece. “The growth outlook being hurt in Europe, and the ongoing sluggish data we have seen in the United States is the underlying issue the stock market is trying to grapple with.”

He said the crisis of confidence was evident as investors parked money in cash and into short-term fixed-income assets.

“Investors are concerned about being able to get, as they say, return of principal, not return on principal,” he added.

Julia Werdigier, Bettina Wassener and Hiroko Tabuchi contributed reporting.

Article source: http://www.nytimes.com/2011/08/20/business/daily-stock-market-activity.html?partner=rss&emc=rss