In Europe, market indexes fell 3 percent, the euro declined and the price of safe assets like German bonds rose as investors continued to fret about the possibility of a Greek default.
The mood carried over to the United States, where bond prices rose and stocks on Wall Street declined. At midmorning, the Standard & Poor’s index of 500 stocks was down 2 percent, while the Dow Jones industrial average and the Nasdaq composite index were down 1.9 percent.
Investors were pulling back from what was a strong end to the previous week. The New York indexes had all gained in the five-day trading period, with the broader market up more than 5 percent, after leaders in the euro zone said they were working together to address the impact of the sovereign debt crisis.
Meetings of European finance ministers at the end of last week and an emergency meeting of the Greek cabinet on Sunday failed to produce any specific commitments on whether the next tranche of 8 billion euros, or $11 billion, in financial aid would be released in time to help Athens meet obligations coming due in mid-October.
On Monday, the market’s attention was focused in part on the results of a conference call between Greek officials and the so-called troika of foreign creditors — the International Monetary Fund, the European Commission and the European Central Bank — as well as further meetings among senior officials in Athens struggling to close a gaping budget gap.
Amid the crisis atmosphere, Prime Minister George Papandreou of Greece canceled a visit to the United States, saying he needed to be at home to work on the rescue package.
Some analysts now fear that given the legal complications in some euro zone countries, and the apparent reluctance of Greece to push ahead on the kind of commitments on spending, wages and privatizations being sought by its partners, Greece might soon default, triggering a domino effect on other euro zone countries like Portugal, Italy or Spain.
Those fears were compounded after the party of Chancellor Angela Merkel of Germany lost ground in a regional election in Berlin on Sunday, amid voter anger over her handling of the debt crisis.
The economic outlook was also downbeat after the secretary-general of OPEC, Abdalla Salem el-Badri, said Monday that global demand for oil was rising less than expected, Bloomberg News reported. For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
No comments:
Post a Comment