Fear out of the unknown
by Peter Switzer
Wall Street didn’t know what to do overnight following some ordinary reports from tech companies, and the anxiety factor notched up a tick with a new Spanish bond auction looming.
The Dow ended the session down 82.79 points, or 0.63 per cent, to 13,032.75 while the S&P 500 index was 5.64 points, or 0.41 per cent, lower to 1385.14.
Part of the small sell-off was some aspects of Intel’s and IBM’s pretty good reports on profits but analysts found some reasons to be slightly concerned. In reality, the reaction looked superficial — company reporting remains better than what these analysts or ‘clowns’ had been predicting.
The main game remains Europe with the US showing that it’s doing better than expected despite, I suspect, there being some relative economic weakness over the next six months.
In Europe, there was good news out of the European Central Bank (ECB) from Jens Weidmann whom Reuters reports said that Spain, “should take care of its own debt woes”. This implies that the ECB might not provide help but I think this is rubbish.
Meanwhile, the latest concern is Portugal and its need to borrow more money! And on top of that, Italy might need more time to balance its budget, which I think is a good thing as the quicker they try to fix their budget problems, the slower Italy will grow.
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Published on: Thursday, April 19, 2012
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