Midday Market Report: Markets Barely Budge on Greece Bailout Plan
By Vincent Trivett Feb 09, 2012 1:40 pm
The Greek deal might not even be approved, and equities markets are barely responding.
European markets closed on a positive note after the Greek government finalized a much-awaited deal on fiscal reforms. The bailout that could avert a global disaster is now one step closer to a certainty.
The European Central Bank still has to approve the Greek austerity plan. German Finance Minister Wolfgang Schaeuble said that the belated Greek plan was "not at a stage where it can be signed off." Jean-Claude Junker, head of the euro-group of finance ministers told reporters, "I do not have reasons to believe that there will be a definitive deal this evening." The finance ministers, who met in Brussels earlier today, are very glad to see progress on Greece's end, and expect a compromise between the Greek politicians and the so-called Troika of the IMF, ECB, and European Commission by next week.
The ECB announced earlier that it is holding its benchmark rate at 1%. ECB President Mario Draghi held his monthly news conference today, where he maintained that interest rates will stay put at least until March unless conditions change. Draghi called the notion that the ECB might share losses on Greek debt "unfounded."
The Greece deal doesn't seem to have affected US equities. Stocks have been choppy, but essentially flat this morning.
- The Dow (^DJI) reached a three-year high today before dropping back. The index is up 0.11% at 12897.69.
- The S&P 500 (SPY) advanced 0.16% to 1,352.17.
- The Nasdaq (^IXIC) rose 0.29% to 2,924.26.
Strong sales in December forced US wholesalers to replenish inventories. Wholesale inventories rose by 1% in December, surpassing economists' forecasts.
One company that benefited from increased consumer spending is Visa (V). Visa earned $1.04 per share in the fourth quarter, up 16% over the same period in 2010. Visa rose 4.31% today, continuing a steady 11.23% rise this year.
Investors are hammering Groupon (GRPN) as its first public quarterly report showed a loss. Despite an unexpected jump in revenue, taxes, expansion, and marketing produced a loss of $0.02 per share. Groupon is currently down 12% today.
Data-streaming giant Akamai Technologies (AKAM) is riding a wave from yesterday's better-than-expected earnings report. The company
repurchased its own shares in August after its share price hit a trough. Improved earnings and the acquisition of competitor Cotendo improved the share price. Akamai is up 9% today.
Oil prices rose for the third straight day. Brent crude oil futures advanced 1.05% on the news from Greece, better-than-expected initial jobless claims in the US, and a cold winter in Europe. West Texas Intermediate rose 1.46%.
The euro and British pound both rose against the dollar, rising 0.245% and 0.0986% respectively.
Investment guru Warren Buffett told Berkshire Hathaway (BRK-A) investors that bonds are "among the most dangerous assets" citing low interest rates and inflation. The yield on the benchmark US 10-year Note rose slightly to 2.05% today.
The House of Representatives passed a bill banning its own members and Executive Branch employees from trading on non-public information that they gather in government chambers. House Majority Leader Eric Cantor struck language from the House version that would require new disclosures from organizations that gather "political intelligence." Political intelligence refers to seeking privileged information from lawmakers and selling that information to hedge funds or other investment houses.
No positions in stocks mentioned.
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