Stocks, euro drop as deadlock continues in Greece - Yahoo Finance Stocks, euro drop as deadlock continues in Greece - Yahoo Finance

Monday, May 28, 2012

Stocks, euro drop as deadlock continues in Greece - Yahoo Finance

Stocks, euro drop as deadlock continues in Greece - Yahoo Finance

NEW YORK (AP) -- A political stalemate in Greece rattled financial markets worldwide on Monday, driving U.S. stocks lower.

The euro sank to a three-month low against the dollar and borrowing costs for Spain and Italy jumped as bond traders anticipated that financial stress could spread far beyond Greece. Investors dumped risky assets and plowed into the safety of the Treasury market, pushing yields to their lowest levels this year.

The Dow Jones industrial average dropped 125.25 points to close at 12,695.35. The Dow has lost more than half of its gains for the year in the past two weeks as worries resurface about Europe and the strength of the U.S. economy.

In Athens, talks between political parties to form a government dragged into a second week. The uncertainty has raised concerns that Greece could miss a debt payment and drop the euro currency. The worry is that if Greece leaves the currency union, bond traders may demand steeper borrowing rates from other troubled countries and push them deeper into debt.

The turmoil could easily spread to the U.S. through the banking system. "The large banks are globally connected," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott. "The concrete fear is that if Greece exits the euro, that would hurt European banks. They'll pull back lending to U.S. banks and then they'd be in worse shape."

In other trading, the Standard & Poor's 500 index dropped 15.04 points to 1,338.35. The Nasdaq composite sank 31.24 points to 2,902.58.

The losses swept across the market. All 10 of the industry groups within the S&P 500 fell.

JPMorgan Chase's $2 billion trading loss continued to hang over bank stocks. JPMorgan dropped 3 percent following news that the executive overseeing its trading strategy would step down. Morgan Stanley and Citigroup, two banks with large trading operations, sank more than 4 percent.

The loss to JPMorgan appears "manageable," said Matt Freund, a portfolio manager at USAA Investments. "But people are looking at other banks and wondering who's going to be next? What else could be lurking?"

Major markets in Europe plunged. France's CAC-40 and Germany's DAX lost 2 percent. Benchmark indexes fell nearly 3 percent in Italy and Spain.

Traders shifted money into the safest of government bonds, pushing Treasury prices up and their yields down. The yield on the 10-year note hit a low for the year, 1.77 percent.

Since hitting its high for the year on May 1, the Dow has been on a steady slide, closing lower on seven of the previous eight trading days. The Dow's 1.7 percent loss last week was its worst since Dec. 16.

Despite the broad market decline, some stocks posted gains:

— Chesapeake Energy Corp. jumped 4 percent on reports that the investor Carl Icahn bought a stake in the natural gas company. Chesapeake's CEO said he'd welcome an investment by Icahn, who is known for shaking up companies.

— Yahoo gained 2 percent. The company replaced its CEO, Scott Thompson. Yahoo reportedly pushed Thompson out for padding his resume.

— Electronics retailer Best Buy Co. rose 1 percent after the company's founder, Richard Schulze, said he would step down as chairman. An investigation found that he knew the CEO was having a relationship with a female employee and didn't tell an audit committee.



Stocks open lower as Europe overshadows jobs data - Yahoo Finance

NEW YORK (AP) -- Stocks slipped in early trading Thursday as unease over Europe overshadowed an encouraging report on unemployment claims and good results from big retailers including Wal-Mart Stores.

The Dow Jones industrial average was down 48 points at 12,548 in the first half-hour of trading. The Standard & Poor's 500 index fell seven points to 1,317. The Nasdaq composite fell 19 points to 2,854.

The Labor Department reported that applications for unemployment benefits held steady last week, a sign that layoffs are not increasing.

Wal-Mart stock rose 5 percent after reporting a 10 percent jump in first-quarter income, beating Wall Street expectations. It was a big turnaround for the retailer, which had suffered during the economic downturn as low-income customers were hit hard by joblessness and home foreclosures.

Despite positive news from the U.S., investors continue to fret about developments in Europe and whether Greece might be forced to exit the euro bloc, something that investors fear would cause turmoil on global markets.

Greece's caretaker Cabinet was sworn in Thursday and will hold power at least until next month's election. In the recently-held elections Greeks didn't given any party a majority, but they did give strong support to politicians who rejected the tough austerity measures that came with the country's financial bailout.

Without that rescue package, Greece will likely default and be forced to leave the 17-country euro zone, which would destabilize other countries that use the euro. German, French and Spanish stock markets all fell more than 1 percent.

Collateral economic damage is already being felt by other members of the euro bloc.

Spain was forced to pay sharply higher interest rates to raise $3.18 billion in a debt auction Thursday. And shares of Bankia, which Spain nationalized last week, plunged 20 percent on a report from the newspaper El Mundo stating that depositors have withdrawn over $1 billion since last Wednesday.

Oil prices continued to trade lower, falling below $93 a barrel on Thursday, extending a sharp two-week sell-off, as traders worried about the potential impact on global growth from the European crisis. Crude oil has plummeted about 12 percent from $106 two weeks ago.

Energy companies traded lower. Chesapeake Energy fell 4 percent, while WPX Energy declined 6 percent.

Among other stocks making big moves:

— GameStop fell 9 percent after the world's largest video game retailer reported its first-quarter profit fell 9.8 percent, as fewer customers visited its stores and bought new games and systems.

— Sears Holdings rose 7 percent after the beleaguered retailer turned a profit in the first quarter, benefiting from a gain on the sale of some stores.



Banks told to display 'your money is protected' notices - Daily Telegraph

The notices will also have to state whether banking licences are shared with another brand, as in this case customers who have money in both are still subject to an overall compensation limit of £85,000.

For example, Halifax and Bank of Scotland – which also own BM Savings – count as one group, whereas NatWest and Royal Bank of Scotland are treated as separate entities by the FSCS.

Andrew Bailey, the FSA's director of UK banks and building societies, said: "Customers need to feel confident about their money and to do this they need to know what the compensation limits are and which scheme would provide cover in the event of a bank, building society or credit union failure.

"Too many people assume that because their branch is located on a local high street in the UK, they are covered by the FSCS. This is not true for UK branches of EEA [European Economic Area ] banks where the home country's deposit guarantee scheme applies."

He added: "Banks, building societies and credit unions will have to display these compensation stickers or posters in the branch window along with a sticker at the cashier's window or desk and a further poster in a prominent position inside."

Similar stickers must also be displayed on websites. The rules will take effect on August 31.


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