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business newsPre-Market Primer: Greece Finally Reaches Austerity Deal
By
Vincent Trivett
Feb 09, 2012 9:15 am
Maybe Greece won't have to default.
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Greek politicians have finally come to an agreement on fiscal reforms needed to secure a second crucial bailout. Until minutes ago, wrangling over pension cuts stalled the talks. Now it's up to the European Central Bank to sign off on the reform package, bail out the Greeks. Private bondholders are prepared to take a 70% writedown on Greek bonds.
Better late than never.
Another sign that the US job market is improving came in this morning. Initial claims for unemployment insurance dropped to 358,000 last week, less than the forecasted 370,000. The four-week moving average also fell to 366,250. The number of people continuing to receive unemployment benefits rose to 64,000.
California, New York, and Florida joined 40 other states in an agreement with banks that will help distressed and underwater homeowners. In this deal the banks will cede 17 billion in debt forgiveness, make 3 billion available for refinancing, and pay 1.5 billion to borrowers who have lost their homes due to foreclosure. The relief package is only available to homeowners whose mortgages have not been bought by Freddie Mac or Fannie Mae. Another catch: The banks are pushing a condition that New York and other states drop lawsuits against them concerning improper foreclosures.
The Bank of England raised its target for purchases by 50 million pounds to 325 million pounds, citing a "weak outlook for near-term growth." The BOE is holding its benchmark rate at 0.5%
The European Central Bank is keeping its benchmark rate at 1%. ECB President Mario Draghi will conduct a press conference on the rate decision and explain the ECB's role in future Greek bailouts later today.
US stock futures are up slightly on the mixed macroeconomic news.
- Dow (^DJI) futures are up 0.04% at 12,884.00.
- S&P 500 (SPY) futures are up 0.22% at 1,349.96.
- Nasdaq (^IXIC) futures are up 0.41% to 2,915.86.
Groupon (GRPN) posted a los of $0.02 per share in its first public financial report. A profit of $0.03 per share was expected.
Market volatility drove profits at private equity giant KKR (KKR) down to $0.73 per share, down 68% from the year before.
Twitter: @vincent_trivett
No positions in stocks mentioned.
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