U.S. stocks wobble as Europe exerts pull
Thursday, October 20, 2011
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Source : MarketWatch.com
Why Europe 's bailout may give false hope ?
U.S. stocks struggled to hold to gains Thursday after Germany and France said they will produce a broad plan to resolve Europe’s debt crisis, easing worries that differences between the two nations could stall a weekend leadThe Philadelphia Federal Reserve said its index of manufacturing activity rebounded to 8.7 in October from negative 17.5 in September, the first positive reading in three months, and topping views for a a negative 10 reading. Read more on Philly Fed.
James Paulsen, chief investment strategist at Wells Capital Management, said the market’s drop reflected anxiety leading into the weekend meeting, and that U.S.
“If we weren’t having good numbers, we’d be at 1,100 [on the S&P 500 Index] or worse,” Paulsen said.
The Standard & Poor’s 500 SPX +0.46% was up 3 points, or 0.2%, at 1,212.46.
Tech stocks lagged, weighed by a 5.7% drop in Dell Inc. DELL +0.60% and declines in chip makers on worries that Thai floods would disrupt some electronic parts production, perhaps for more than a quarter. Read more on Dell and Thai floods.
The Nasdaq Composite COMP -0.21% fell 11 points, or 0.4%, to 2,593.4.
Separately, the Conference Board’s index of leading indicators rose 0.2% in September, in line with views. And the National Association of Realtors said existing home sales fell 3% in September, to a seasonally adjusted annually rate of 4.91 million. Economists had expected 4.9 million. Read more on leading indicators and read more on existing home sales.
The Philly Fed survey added to a growing sense among Wall Street economists that the U.S.
“This once again speaks to the fact that the underlying health of the U.S. economy is intact and that Europe is the omnipresent threat,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co., in emailed comments.
Ahead of the opening bell, the Labor Department said first-time claims for unemployment benefits slipped to 403,000 last week from 409,000 two weeks ago. Economists had expected a drop to 400,000. Many analysts look for a sustained fall below 400,000 as a sign labor markets are improving
ers summit.
In a joint statement, the two European Union heavyweights said they would meet Saturday night ahead of the EU summit on Sunday, with the aim of providing a “comprehensive and ambitious response to the current crisis in the euro area,” including a revamped bailout fund and plans to strengthen European bank capital. They’ll follow that meeting with another one no later than Wednesday at which they will finalize their agreement, according to the statement.
Extending the week’s choppy trading, stocks have spent most of Thursday’s session bouncing between gains and losses, weighed by earlier news reports that the EU summit — seen as a crucial step in coming up with new measures to prevent one or more sovereign debt defaults in Europe — could be postponed.
“People are really concerned about an 11th hour resolution” for Europe , said Doug Roberts, chief investment officer for Channel Capital Research.
The Dow Jones Industrial AverageDJIA +0.32% bounced higher after the statement, though gains were tenuous. It was recently up less than 1 point at 11,503.
The Philadelphia Federal Reserve said its index of manufacturing activity rebounded to 8.7 in October from negative 17.5 in September, the first positive reading in three months, and topping views for a a negative 10 reading. Read more on Philly Fed.
James Paulsen, chief investment strategist at Wells Capital Management, said the market’s drop reflected anxiety leading into the weekend meeting, and that U.S.
“If we weren’t having good numbers, we’d be at 1,100 [on the S&P 500 Index] or worse,” Paulsen said.
The Standard & Poor’s 500 SPX +0.46% was up 3 points, or 0.2%, at 1,212.46.
Tech stocks lagged, weighed by a 5.7% drop in Dell Inc. DELL +0.60% and declines in chip makers on worries that Thai floods would disrupt some electronic parts production, perhaps for more than a quarter. Read more on Dell and Thai floods.
The Nasdaq Composite COMP -0.21% fell 11 points, or 0.4%, to 2,593.4.
Separately, the Conference Board’s index of leading indicators rose 0.2% in September, in line with views. And the National Association of Realtors said existing home sales fell 3% in September, to a seasonally adjusted annually rate of 4.91 million. Economists had expected 4.9 million. Read more on leading indicators and read more on existing home sales.
The Philly Fed survey added to a growing sense among Wall Street economists that the U.S.
“This once again speaks to the fact that the underlying health of the U.S. economy is intact and that Europe is the omnipresent threat,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co., in emailed comments.
Ahead of the opening bell, the Labor Department said first-time claims for unemployment benefits slipped to 403,000 last week from 409,000 two weeks ago. Economists had expected a drop to 400,000. Many analysts look for a sustained fall below 400,000 as a sign labor markets are improving
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