A losing day is never easy to like but given our two per cent slump yesterday a mere 0.26 per cent slip on Wall Street is a positive result! It differentiates 2012 from 2011 where a virtual sniff of bad EU news would have crippled confidence and resulted in triple-digit losses.
The stories moving US markets were Greece, of course, and the minutes from the Federal Reserve’s most recent interest rate meeting.
Wall Street overnight
The Dow fell 33.45 points or 0.26 per cent to finish at 12,598.55 while the broader S&P 500 index lost 5.86 points or 0.44 per cent to 1324.8.
And while I can be happy about the small fall on the Street, it’s worth noting that the Dow has lost ground 10 out of the past 11 sessions. This is the sell-off that was overdue after the Yanks were up over 20 per cent since early October. In our case we were up around 14 per cent and now have given up around six per cent and so I’m hoping we are getting close to a new bottom but the news flow out of Greece is not making me all that comfortable with that hope. Wall Street’s muted reaction overnight is the only bright spot amidst a hell of a lot of European dark clouds.
Markets went up when Germany’s Angela Merkel said she wanted Greece to stay in the eurozone but trumping this were reports that the European Central Bank had stopped working with some Greek banks. This was market scuttlebutt, which you get a lot of in these times.
The new election for Greece will be June 17 and so we have about a month of Greek anxiety to deal with!
Helping the US is the promise of QE3 and this has put a floor under US negative inclinations.
Positive news
The Yanks also got good housing numbers with new starts up 2.6 per cent but even better was a very solid read on industrial production, which grew at its fastest growth in over a year, according to the Fed.
The jump was 1.1 per cent when economists expected a 0.6 per cent rise. The US economy is doing better than the negative types were banking on and it provides hope that if Europe can sort out its debt problems then stock markets, worldwide, will be off to the races!
But that is some time off yet.
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