Posts Tagged ‘new high’

Greece Bond Spreads To Highest Level

Tuesday, January 11th, 2011

The spread between Greek and German 10-year bonds has reached its highest level since Greece joined the euro, rising above 10 percent. A day before a euro1.5 billion ($1.96 billion) auction of 6-month treasury bills – considered an important test of market sentiment.  Greece has launched a major effort to cut borrowing costs in exchange for bailout loans worth euro110 billion from the IMF and other countries using the euro.

The government says it wants to return to long-term bond markets sometime this year. But the interest gap, or spread, on 10-year bonds compared with the German issue reached a worrying 1,001.1 basis points amid renewed worries about some EU nations’ fight to handle heavy debt loads.  Greece’s Socialist government is struggling to push through reforms demanded by bailout-loan inspectors that are meant to replace drastic one-off spending cuts and emergency tax measures with longer-term fiscal improvements.

On Monday, the Finance Ministry said provisional data showed the deficit was cut more than expected in 2010. The deficit amounted to euro19.6 billion, down from euro30.87 billion in 2009. That amounts to a reduction of 36.5 percent, exceeding the 33.2 percent target. Net revenue gains were below target, however, with a 5.5 percent increase compared with 2009 missing the goal of 6 percent, according to ministry figures.

Greek Finance Minister George Papanconstantinou sought to reassure investors over the country’s debt burden on Tuesday, saying spreads between Greek and German bonds were high because of broader market turbulence rather than a real threat of default. Papanconstantinou said he expected to see a “major decision” in the next two months which would “once and for all settle the issue of the sustainability of debt in the euro zone”.

EU leaders plan to introduce a permanent bailout mechanism in 2013, a move which required a treaty amendment that makes it possible to aid euro zone members in financial difficulties. It will be activated when the European Financial Stability Facility, used for Greece and Ireland, expires.

Earlier on Tuesday, Greece sold 1.95 billion euros ($2.52 billion) of six-month T-bills. The yield was 8 basis points higher, at 4.9 percent, from a similar auction in November.

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Bulls Win Again 2010; Markets Up For The Year

Friday, December 31st, 2010

U.S. stocks ended 2010 with strong gains, advancing for the second year in a row, as stimulus measures from the Federal Reserve and the government and recent signs of improvement in the economy encouraged investors’ spirits. The Dow Jones Industrial Average DJIA closed the year at 11,577.51 on Friday, up 7.8 points for the session, and less than 10 points below a two-year high it reached on Wednesday. The Dow jumped 5.2% in December and is up 11% for the year. The S&P 500 index (SPX) closed the year at 1,257.64 on Friday. The broad index still jumped 6.5% for the month and is up 12.8% in 2010. The Nasdaq Composite (COMP) closed the year at 2,652.87 Friday, leaving it with 6.2% advance in December and a 16.9% gain for the year.

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Traders Are Back To Selling; Gold New All-Time High

Tuesday, September 7th, 2010

Stocks staged gains in the first few sessions of September, but market participants returned from Labor Day ready to sell. Their efforts were focused on financials and other cyclical plays. In the four sessions leading up to Labor Day weekend the S&P gained more than 5%. In the wake of such a heady move came rekindled concerns about the health of European banks. That invoked stiff selling among bank stocks. Weakness among large-cap banking issues undermined the broader financial sector. As such, financials fell to a collective loss of 2.4% and closed at session lows. Profit taking also undercut other cyclical plays, like consumer discretionary stocks and energy stocks. Both of those sectors fell 1.6%.

Still, such widespread weakness stoked volatility. That sent the Volatility Index (VIX) up almost 12% from the four-month low that it set late last week. Amid the stock market’s slide and the increase in volatility Treasuries attracted strong support – the benchmark 10-year Note climbed almost a full point and the 30-year Bond tacked on two full points.

Results from an auction of 3-year Notes were largely lackluster. The auction drew a bid-to-cover of 3.2, dollar demand of $105.9 billion and an indirect bidder participation rate of 42.4%. The four previous auctions held an average bid-to-cover of almost 3.3, dollar demand of about $116.3 billion, and an average indirect bidder participation rate of 44.6%. The greenback made a big gain by climbing 0.9% against a basket of competing currencies. Most of the move was against the euro, which dropped 1.4% in its steepest single-session slide in nearly four weeks.

Favor for safety also sparked buying in the yen, which set a fractionally improved 15-year high of 83.5 yen per dollar. Japan’s central bank brought little surprise with its decision to keep its benchmark lending rate at 0.1%.

Gold New High

Gold prices settled at a new high Tuesday as investors sought the safety of the metal on news that the eurozone stress tests were weaker than previously reported. Gold for December delivery closed $8.20 higher to $1,259.30 an ounce. The gold price Tuesday has traded as high as $1,261.60 and as low as $1,246.40 during the session. The U.S. dollar index was rising 0.81% to $82.74 while the euro was falling 1.25% to $1.27 vs. the dollar. The spot gold price Tuesday was soaring $11, according to Kitco’s gold index.

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DJIA Flirting With 11,000

Monday, April 5th, 2010

Stocks spent the session in the black today, as the Street cheered the largest monthly job gain since December 2007. More specifically, traders donned rose-colored glasses to view the Labor Department’s employment report from Friday, which indicated that 162,000 jobs were added in March, compared to economists’ expectations for a gain of 190,000 jobs. Elsewhere, stronger-than-anticipated data on service-sector growth and a pleasantly surprising real estate report added fuel to the bulls’ fire, stoking hopes for a healing economy. Though the DJIA couldn’t pick up enough steam to topple the psychologically significant 11,000 level, the blue-chip barometer tapped a fresh multi-month peak nonetheless.

After touching a new 18-month high of 10,988.06 early in the session, the DJIA 10,973.55 settled on a more modest gain of 46.5 points, or 0.4%. Twenty-one of the Dow’s 30 blue chips finished higher, with American Express (AXP) and Caterpillar (CAT) leading the advancers. Meanwhile, Boeing (BA) and Travelers Co. (TRV) paced the eight declining blue chips, while the shares of Wal-Mart (WMT) finished at breakeven.

The S&P 1,187.44 finished near its own multi-month high of 1,187.73, ending with a gain of 9.3 points, or 0.8%. Finally, though the Nasdaq 2,429.53 was the lone index to fall short of a new 52-week peak, the tech-rich index advanced 27 points, or 1.1%, with help from Apple Inc.’s (AAPL) iPad-related hype.

Turning to equities in focus, the Securities and Exchange Commission (SEC) is investigating the accounting practices of several former Dell, Inc. (DELL) employees.

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