Interactive
Euro zone bank stress test calculator
Use the Reuters Breakingviews stress test calculator to calculate how the Target core Tier 1 capital ratio and sovereign haircut levels affect the amount of capital banks need to pass the stress test. Full Coverage
Wall Street ends near 5-month high before Europe test
Traders work on the floor of the New York Stock Exchange January 10, 2012.
Credit: Reuters/Brendan McDermid
NEW YORK |
NEW YORK (Reuters) - Stocks held firm near recent five-month highs on Wednesday as investors awaited key bond market tests for Europe in the next two days that could determine the direction of the euro zone crisis.
U.S. equities have been performing better in the face of turmoil from Europe's sovereign debt problems. This is a major change from four months ago and comes as investors have taken improving U.S. economic data to heart and an optimistic view about corporate earnings.
Wall Street recovered from early losses on Wednesday brought on by a warning from Fitch Ratings of severe repercussions, including a possible collapse of the euro, without more supportive action by the European Central Bank.
The Fitch news sent the euro to its lowest level in 16 months against the U.S. dollar, which would normally have spelled steeper losses for stocks.
"The U.S. is being looked at clearly as the safe-haven trade, not only on the fixed income side but now even from equity investors," said Ken Polcari, managing director at ICAP Equities in New York.
"We keep talking about the same stuff, but it's been that way for eight, nine months ... I hate to say it, but it's almost like people are immune to it now."
The benchmark S&P 500 index recovered to close little changed to continue the recent decoupling of U.S. stocks and the movement of the embattled euro.
The Dow Jones industrial average .DJI slipped 13.02 points, or 0.10 percent, to 12,449.45. The Standard & Poor's 500 Index .SPX.INX gained 0.40 point, or 0.03 percent, to 1,292.48. The Nasdaq Composite Index .IXIC gained 8.26 points, or 0.31 percent, to 2,710.76.
Key bond auctions later this week from Italy and Spain, two countries at the center of the euro zone crisis, could hurt sentiment if they go poorly.
Materials shares moved higher, boosted by U.S. Steel Corp (X.N), up 4.7 percent to $28.56, after Credit Suisse upgraded fellow metals company AK Steel (AKS.N) to an "outperform" rating. The S&P materials sector .GSPM gained 1 percent.
Further reflecting the weakening link between the euro zone and U.S. stock market, the 50-day correlation between the S&P 500 e-mini futures contract and the euro crossed the zero line this week after four months of being in positive territory, indicating they were no longer on the same path.
Chevron Corp (CVX.N) slipped 2.3 percent to $105.35 in extended trade after the No. 2 U.S. oil company gave its fourth-quarter outlook.
Supervalu Inc (SVU.N) shares dropped 12.5 percent to $7.34 after quarterly sales at the third-largest U.S. supermarket chain missed estimates.
Clothing retailer Urban Outfitters Inc (URBN.O), grappling with inventory and declining margins, said its chief executive resigned unexpectedly, sending the company's shares tumbling 18.6 percent to $23.93.
On the Nasdaq, Crocs (CROX.O) shares rose 16.4 percent to $18.56 after the shoemaker said it expects fourth-quarter revenue to be at the high end of its earlier estimate, becoming the latest footwear company to flag strong sales numbers for the holiday season.
Volume was modest with about 6.65 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, almost even with the daily average of 6.7 billion.
Advancing stocks outnumbered declining ones on the NYSE by 1,646 to 1,352, while on the Nasdaq, advancers beat decliners 1,482 to 1,009.
(Reporting By Chuck Mikolajczak; Editing by Kenneth Barry)
- Tweet this
- Link this
- Share this
- Digg this
- Reprints
Big money wanted the { cops } SEC out off the way, that is why they successfully lobbied for self regulated markets and banks. If you want to rob the hard working American people then you need to remove the police. Big money went after small money using illegal means. How is your 401k ?
401k’s and Roth IRA’s is the biggest form of capital going into the market. Every month money out of peoples pay checks enters the market. Thats like turning on a faucet that you never shut off. We know what happens when you stick a bucket under a faucet that you never turn off. It go’s up, up, and over flows. So why isn’t the market going up? The answer is all the Illegal short selling that is not being regulated.
Shorting = borrowing stock to sell into the bid. If you borrow something then you must return it at a later date. In the stock market, the rule is 3 days to return the number of shares that you borrowed. The brokers are using debt swaps so that they don’t have to buy in by due dates to cover short possitions. Debt swaps = you shorted stock xyz down and owe a buy in of that stock , but instead of returning xyz number of shares in ,the short broker says to the investors broker from which they borrowed from, We will pay you interest and let you have stock of company abc instead of xyz to hold on to till we do come up with the number of shares of xyz that we owe you. Mean while the share holders broker is making money from the interest payed while their share holding customers stock is worth less. The short brokers and short customer like debt swaps so that they can keep the price down of the stock in order to get on message boards and pay someone to write fals articles of a company in order to try to convince share holders that their stock is a crappy worthless stock so you might as well sell because it will never go up.
You see, they are manipulating and controlling the market. And our brokers are being payed off in order to allow it. Where is the investors agent who protects them?
We have new regulation that just got implamented, and the sec is not our only hope of cleaning up this mess of corruption. We as a people must share info and educate each other so that we protect our savings. It is amazing that the public gives thier money to a broker with trust and does nothing to educate them selves of how the market operates and the rules. Googleing your questions about Shorting/Naked shorting and fraud in the stock market and knowing the regulation that helps to protect you hard earened money is important, because if you don’t protect and watch out for your money who will? Don’t expect your broker to protect you, since he is being payed interest to not protect you.
Banks don’t like the Vulker rule. Google it.
How does one realistically IGNORE Europe’s fiscal problems? No one is coming in to:
< make DEBT evaporate
< force politicians to cut their budgets
< force governments to start paying down debt
< force citizens to willingly embrace austerity and tank their standard of living.
This sounds like the kid who covers his eyes to shield them from something he finds troubling to watch!! Problem doesn’t go away. He merely PRETENDS it isn’t there!!
Won’t it be something when ALL OF A SUDDEN REALITY SETS IN???
Hold on to your shorts!!
Gorm
Follow Reuters