Midday Market Report: Markets Slip on Greek Dithering

The Greek Fiscal/Financial/Moral Crisis moves into its zillionth day of cliff-hanging intensity today as the Greek government, seemingly reveling in the international attention, still hasn't finalized fiscal reforms tied to the bailout package from the 'troika' of the IMF, European Commission, and European Central Bank.

 

While simultaneously negotiating with creditors to ensure a voluntary write down of about 70% of net present value of outstanding Greek debt, the government is mulling over reforms such as reducing the budget deficit, overcapitalizing banks, trimming vacation and pension benefits, and lowering the minimum wage.  

 

Greek public sector employees, who balk at being asked to wait until the age of 55 to retire and regularly claim a 13th month in 

annual compensation, are particularly upset. Cutting wages, especially when unemployment is already high, is not going to help Greeks very much. The main private and public sector unions have scheduled a general strike for tomorrow. 

 

One member of Prime Minister Papademos' government, the New Democracy Party, vows to oppose the measures set by the troika.

 

Times are tense indeed. Deutsche Bank's (DB) Josef Ackermann called this a "make or break" moment, like many previous moments. German Chancellor Angela Merkel echoed everyone's sense of common sense and wondered why this crucial decision is taking so long and presciently said that "time is running out."

 

All of this stressful stuff is of course taking its toll on the markets. US equities are still above Thursday's close, but have eased off most of the gains made after the surprisingly positive jobs data in the US. Here's a snapshot of the main indices at midday:

The euro fell to $1.3139 this morning. The strong dollar and uncertainty over whether the Greek government will pass those reforms in time to get the bailout money and avoid bankruptcy drove oil prices down. West Texas Intermediate erased gains made on Friday, declining by 0.91% to $96.95/barrel. Brent Crude futures rose 0.83% to $115.53. 

 

Precious metals are also off today. Gold is down 0.84% at $1,725.70 an ounce. Silver slid 0.35% to 33.63 an ounce.

The toy maker Hasbro (HAS) beat earnings expectations today, delivering $1.06 per share. Hasbro is trading at 2.12% over Friday's close.

The health-care company Humana (HUM) is down 4.67% in today's trading, after reporting lower-than-expected earnings depressed by a loss in its Employer Group.