Thursday, May 7, 2015
YOLO COUNTY NEWS
99 CENTS

World stocks fall on European contagion concern

By
From page A2 | June 14, 2012 |

MILAN (AP) — World stock markets sank Thursday amid ominous signs that debt market turmoil roiling Spain is threatening Italy, which as the eurozone’s third-largest economy is considered too big to bail out.

Spain’s 10-year bond yield — a key indicator of a country’s creditworthiness — rose to near 7 percent, a euro-era record for the country, after Moody’s downgraded the country by three notches. Madrid accepted up to $125 billion in loans to rescue its banks, but investors are worried the government may be unable to repay the money.

Concern that Spain’s market problems could destabilize Italy pushed Rome’s own borrowing costs higher as well, despite Premier Mario Monti’s assurances that Italy will not need a bail out.

The country paid a worryingly high 6.1 percent on 10-year bonds in an auction. Italy’s overall debt is an enormous $2.4 trillion, requiring frequent market access to repay investors whose bonds are expiring. To lower that debt, the economy needs to become more competitive, but it so far remains in a deep recession.

As market pressure ratcheted higher on Spain and Italy, European stocks fell. Germany’s DAX fell 0.2 percent to 6,137 and France’s CAC-40 shed 0.1 percent to 3,027. Britain’s FTSE 100 lost 0.5 percent at 5,457.

Wall Street appeared headed for a choppy session, with futures swinging between gains and losses. Dow Jones industrial futures was nearly flat at 12,421 while and S&P 500 futures were nearly unchanged at 1,308.18.

European losses echoed those earlier in Asia. Japan’s Nikkei 225 index slipped 0.2 percent to close at 8,568.89. Australia’s S&P/ASX 200 dropped 0.5 percent to 4,042.20. Hong Kong’s Hang Seng shed 1.2 percent to 18,808.40 and the Shanghai Composite Index fell 1 percent to 2,295.95.

Despite concerns in Europe, Greek stocks were rallying hard on hopes that the election on Sunday would yield a government that would stick to the country’s bailout terms and secure its membership in the euro currency union. The Athens index was up a stunning 8.8 percent, with banks stocks leading the way.

“This week was always going to be a volatile one, and thus far it’s playing out perfectly to script,” said Cameron Peacock, IG markets analyst. “The Greek election will undoubtedly be seen as a landmark event in history, as it goes to the core of Greece’s continuation in the eurozone and the fate of the region itself. ”

If political parties are elected that favor reneging on the program — considered by many Greeks to have imposed intolerable hardships — the country’s international bailout and its membership in the 17-nation euro currency union would be at risk.

Apart from the financial maelstrom in Europe, investors are also worried about the pace of growth in the U.S. and China, the world’s first- and second-largest economies.

Investors have been holding on to hopes that both countries’ respective central banks will provide some type of stimulus.

Dickie Wong, executive director of research at Kingston Securities Ltd. in Hong Kong, said he expects the Fed might renew its “Operation Twist” program under which it sells shorter-term securities and buys longer-term bonds to keep their rates down. The current program expires at the end of June.

The Fed has also done two rounds of bond purchases to try to lower long-term interest rates and encourage borrowing and spending.

“The market highly expects the Fed will take some steps to stimulate economic growth,” Wong said. “Next week’s Fed Open Market Committee meeting will be the last one before Operation Twist ends, so I think they will introduce some kind of new measure.”

Benchmark oil for July delivery was up 11 cents to $82.74 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 70 cents to finish at $82.62 per barrel on the Nymex on Wednesday.

In currency trading, the euro fell slightly to $1.2569 from $1.2589 late Wednesday in New York. The dollar fell slightly to 79.21 yen from 79.33 yen.

————

By Colleen Barry. Pamela Sampson contributed from Bangkok

Comments

comments

The Associated Press

  • Recent Posts

  • Enter your email address to subscribe to this newspaper and receive notifications of new articles by email.

  • .

    News

    Internationally known musician Butterscotch brings it home for Whole Earth

    By Landon Christensen | From Page: A1 | Gallery

     
    May’s ArtAbout is a wheely big show

    By Sandy Thai | From Page: A1 | Gallery

    Whole Earth Festival honors ‘Rooted Living’

    By Tanya Perez | From Page: A1 | Gallery

     
    Colleges move to expand services for immigrant students

    By The Associated Press | From Page: A1 | Gallery

    Fourth of July concessionaires solicited

    By Enterprise staff | From Page: A3Comments are off for this post

     
    Per Capita Davis: A shout-out to Cool Davis

    By John Mott-Smith | From Page: A3

    Learn all about bats on a Putah Creek night tour

    By Special to The Enterprise | From Page: A3 | Gallery

     
    U.S. gives farmers approval to spray crops from drones

    By The Associated Press | From Page: A3 | Gallery

    Concert aims to fund wheelchair-accessible van

    By Enterprise staff | From Page: A3

     
    Nesbitt speaks at Senior Health and Fitness Day

    By Special to The Enterprise | From Page: A3

    Don’t forget STEAC’s food drive Saturday

    By Enterprise staff | From Page: A4

     
    Sudwerk celebration marks debut of new mural

    By Special to The Enterprise | From Page: A4 | Gallery

     
    Davis Bicycles! members always step up

    By Bob Schultz | From Page: A4

     
    Awards recognize work with special-needs students

    By Jeff Hudson | From Page: A6

    Independent study enrollment underway

    By Enterprise staff | From Page: A6

     
    Tour de Cluck tickets on sale now

    By Enterprise staff | From Page: A7 | Gallery

    .

    Forum

     
    The big problem with the new SAT

    By Special to The Enterprise | From Page: A8

    The Davis I knew is gone …

    By Letters to the Editor | From Page: A8

     
    Recruit blacks for police jobs

    By Letters to the Editor | From Page: A8

    Thank you, Davis pet community

    By Letters to the Editor | From Page: A8

     
    .

    Sports

    Devils end regular season with a bang

    By Enterprise staff | From Page: B1 | Gallery

     
    UCD’s Vivolo is league’s top linkster

    By Enterprise staff | From Page: B1 | Gallery

    Hot-shooting Aggie women open NCAA golf regionals

    By Bruce Gallaudet | From Page: B1 | Gallery

     
    UCD hoopsters honored for community outreach

    By Special to The Enterprise | From Page: B1 | Gallery

    Tour of California to speed through Davis

    By Bruce Gallaudet | From Page: B1 | Gallery

     
    Sports briefs: Aggie Nixon wins BW weekly award

    By Enterprise staff | From Page: B2

     
    Youth roundup: Diamonds rock Regionals in Long Beach

    By Enterprise staff | From Page: B3 | Gallery

    Junior wrestlers and their coaches compete in Natomas

    By Enterprise staff | From Page: B3

     
    Pro baseball roundup: Aces double down on River Cats, 6-3

    By Staff and wire reports | From Page: B10

    .

    Features

    DHS journalism students auctioning variety of services

    By Special to The Enterprise | From Page: B4

     
    Young journalists have Birch Lane covered

    By Anne Ternus-Bellamy | From Page: B4 | Gallery

    Rec Report: May is Water Safety Month

    By Special to The Enterprise | From Page: B4

     
    What’s happening

    By Anne Ternus-Bellamy | From Page: B4

    SHED, a modern grange in Healdsburg

    By Ann Evans | From Page: A10 | Gallery

     
    A century of life, love and happiness

    By Special to The Enterprise | From Page: A10

    .

    Arts

     
    Disco dance party set Sunday at I-House

    By Special to The Enterprise | From Page: A5

    Choral concert to present ‘Songs of Peace’

    By Special to The Enterprise | From Page: A5

     
    ‘The Art of Being an Aggie’ extended to May 22

    By Special to The Enterprise | From Page: A5

    The Show Ponies to perform at Davis Bike Collective

    By Enterprise staff | From Page: A5

     
    Local boys return with band KALYDE for Whole Earth Fesitval

    By Special to The Enterprise | From Page: A9

    The question is: Is there craft beer?

    By Michael Lewis | From Page: A9

     
    Winners of Student Writing Contest featured at Stories on Stage Davis

    By Special to The Enterprise | From Page: A9 | Gallery

     
    .

    Business

    .

    Obituaries

    .

    Comics

    Comics: Thursday, May 7, 2015

    By Creator | From Page: B8