NY Times May 6, 2010 Once Again, Debt Worries Unsettle Wall St. By CHRISTINE HAUSER
Wall Street tumbled Thursday, the third day of sharply lower trading. Investors took in the latest reports in the United States on jobless filings, retail sales and productivity, and then turned their attention back to Europe and the concerns that Greece’s debt problems might spread. The uncertainty pushed the euro to its lowest level in 14 months, at $1.2746 to the dollar. The dollar’s rise sent commodities prices lower. Europe’s debt worried continued to play out, both on the streets and in legislative chambers. Greek lawmakers late Thursday approved a crucial austerity bill needed to tap into a $141.9 billion aid package from the 15 other countries that use the euro and the International Monetary Fund. And German lawmakers were expected to vote Friday on Berlin’s 22.4 billion-euro share of the bailout package. The Greek government needs $11.6 billion by May 19 to cover debt payments. But a resolution of its problems is considered only a temporary fix — similar issues are looming for Spain and Portugal, which both had their debt ratings downgraded in recent days. In afternoon trading, the Dow Jones industrial average was down 2.3 percent, or 148.87 points. The Standard & Poor’s 500-stock index was down 30.98 points or 2.66 percent, and the Nasdaq was down 77.21 points, or 3.22 percent. In London, the FTSE 100 was down 1.5 percent, the DAX in Frankfurt dropped 0.84 percent while the CAC-40 in Paris dropped 2.2 percent. The unrest has threatened to polarize Greek society at a time when millions are already reeling over the effects of the financial crisis. During protests on Wednesday, police said protesters set fire to a bank in Athens, killing three workers. Earlier on Thursday, investors listened to hear if the European Central Bank would announce measures — like buying government bonds or even cutting rates — that would have calm the markets. While the central bank president, Jean-Claude Trichet, offered some reassuring words — saying that Athens was not in danger of defaulting and that countries like Portugal and Spain are substantially different from Greece — some analysts said he did not do enough. “They would have loved to have seen something bold,” Phil Orlando, chief equity market strategist at Federated Investors, said of investors. “And certainly a cut in the rate would have qualified.” Art Hogan, the New York-based chief market analyst at Jefferies & Company, said “It is fair to say that we know the E.C.B. is going to stick to their script for a while.” Mr. Hogan said that it was difficult to figure out just what was driving the market. “We have got a lot of competing forces,” he said. In economic news, the Labor Department reported new claims for jobless benefits fell less than expected last week. And while productivity rose more than expected in the first quarter, much of it was the result of a drop in labor costs, which typically doesn’t bode well for consumer spending. And the retailing industry collectively posted a 0.5 percent year-over-year sales increase at stores open at least a year, Thomson Reuters said. In April 2009, the industry suffered a 2.7 percent decline. Combined sales for March and April, however, rose 4.8 percent, Thomson Reuters said. Mr. Hogan characterized April retail sales as weak and “that is not helping”, Mr. Hogan said. Other economic data was “typically in line with the string that we have seen. It is in line and it is positive.” _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
