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Posted by HY Markets on Tuesday July 20, 2010 12:34 am
Indices
– The euro fell broadly on Monday, as investors grew cautious
on the health of European banks ahead of results of stress tests on the
sector, while stocks struggled for direction ahead of the onset of the
U.S. corporate earnings season. The second-quarter earnings season was
looming large for investors who are seeking a clearer picture of the
economy's prospects, as a fading recovery, persistently high
unemployment in the United States, Europe's debt troubles and
commercial real estate losses have kept concerns of a double-dip
recession alive. Markets were also jittery about Europe's fiscal issues
and the health of its financial sector ahead of the stress tests on the
continent's banks, including many regional banks where markets suspect
most of the sore spots lie as it seeks to restore confidence in the
sector. The S&P 500 rose more than 5 percent last week, its best
weekly performance of the year, despite rising fears in the past two
weeks of a double-dip economic recession. U.S. stocks wavered on
Wednesday after disclosures that Federal Reserve policy makers in June
expressed concern about the pace of the U.S. recovery. Earlier in the
day, the government reported that U.S. retail sales in June declined
for a second straight month. Markets were choppy throughout the day as
the fresh signs that economic growth looks sluggish at best dimmed the
prospect of strong corporate results and tarnished the upbeat sentiment
from blow-out quarterly results by top chip maker Intel. Fed policy
makers felt they should be ready to consider additional steps to boost
the U.S. economy if an already softening outlook took a noticeable turn
for the worse. World stocks staged a late-day surge to end flat on
Thursday following positive developments at BP Plc and Goldman Sachs,
while the dollar fell broadly on downbeat U.S. manufacturing and
inflation data. Financial markets all week have battled conflicting
signals from data showing a slowdown in the U.S. economy's recovery on
the one hand and strong corporate earnings on the other hand. The New
York Federal Reserve Bank said manufacturing in New York State hit the
lowest level since December 2009, while U.S. producer prices fell 0.5
percent last month. The negative data overshadowed an unexpectedly
large drop in first-time claims for jobless benefits last week, with
claims falling 29,000 to a two-year low of 429,000 as seasonal layoffs
at factories eased. Global share prices slid on Friday after
disappointing revenue reports from bellwether U.S. corporations
dovetailed with subdued U.S. inflation and slumping consumer confidence
data, driving up the price of Treasuries as investors sought safety.
The combination of reports undermined the fragile confidence in the
global economy.
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