Dow Climbs, Nasdaq Slips in Tumultuous Trading

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Published June 16, 2011

| FOXBusiness

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The Nasdaq edged lower while the Dow climbed as traders reacted to a flurry of news from Greece and mixed economic reports. 

Today's Markets

The Dow Jones Industrial Average gained 64.3 points, or 0.54%, to 11,962, the S&P 500 was up 2.2 points, or 0.18%, to 1,268 and the Nasdaq Composite slid 7.8 points, or 0.29%, to 2,624. The FOX 50 was up 2.6 points to 891.  

The markets were highly-choppy on Thursday, with the VIX, a gauge of volatility, jumping as much as 15% on the day. 

Greece has been struggling to find a solution to pay back its enormous public-debt load without a restructuring or default.  Such an event in a major euro zone country could disrupt financial markets around the world, traders say.   

"Were looking at the story out of Europe," said Joe Saluzzi, co-manager of trading at Themis Trading, adding sovereign debt concerns in several euro zone countries might pose a risk to worldwide debt markets. 

In what some analysts have seen as a stabilizing event, International Monetary Fund and European Union officials strongly hinted on Thursday that they would be able to provide a rescue package that would stave off such a debt event. 

"We are ready to provide support [to Greece] because it is an absolutely important issue for Greece, for Europe and the whole global economy," Zhu Min, a special advisor to the IMF's managing director, said in Paris, according to a report by Reuters

The situation in Greece has been unstable in recent days, as citizens have protested the concept of taking deeper austerity measures to reduce the national debt.  Indeed, the events have caused upheaval within government, with several senior officials resigning and Greek Prime Minister George Papandreou announcing plans to reshuffle the government. 

On the domestic front, the closely-watched Philadelphia Federal Reserve's manufacturing report showed manufacturing activity unexpectedly contracted in the region in early June.  The gauge fell to -7.7 from 3.9 the prior month, the lowest in 31 months, a much weaker reading than the 6.8 Wall Street was expecting.  The report comes on the heels of a dismal report from the New York Fed, showing manufacturing in that region plunged in June.  

The report also noted that there was "little overall improvement in the labor market." However, indications that price pressures caused by high energy prices are moderating helped somewhat ease inflation concerns. 

Weekly claims for unemployment benefits fell to 414,000 from a revised 430,000 in the prior week.  Economists expected claims to drop to 420,000 for the week. The timely snapshot of the labor market has been above the 400,00-level for several weeks, which has called into question the robustness of the recovery in the labor market, which many economists say is crucial to broader economic well-being.

Fresh data on the new housing market came in slightly better than expected as well.  New housing starts climbed 3.5% to an annualized unit-rate of 560,000 in May, topping forecasts of 540,000.  Building permits increased 8.7% to an annualized unit-rate of 612,000, also beating estimates of 558,000. 

In currencies, the euro gained 0.23% against the U.S. dollar after falling to the lowest level since early May.  The greenback gained 0.03% against a basket of world currencies, trimming earlier gains. 

Energy markets edged higher after plunging in the prior session. 

Light, sweet crude was up 14 cents, or 0.15%, to $94.95 a barrel.  Wholesale RBOB gasoline was up 3 cents, or 0.89%, to $2.95 a gallon. 

A gallon of regular gas at the pump costs $3.69 on average nationwide, down from $3.94 last month, but well above the $2.70 drivers paid last year. 

In metals, gold was up $3.70, or 0.24%, to $1,530 a troy ounce.  Silver gained 15 cent, or 0.42%, to $35.56 a troy ounce. 

Corporate News

Energy Transfer (ETE) inked a deal to acquire Southern Union (SUG) for $7.9 billion.  

Pandora (P) shares fell below their initial public offering price in the second day of trading. 

Foreign Markets

The English FTSE 100 was down 0.03% to 5,699, the French CAC 40 slipped 0.76% to 3,792 and the German DAX was off 0.07% to 7,110. 

In Asia, the Japanese Nikkei 225 tumbled 1.7% to 9,411 and the Chinese Hang Seng dipped 1.8% to 21,953. 

URL

http://www.foxbusiness.com/markets/2011/06/16/greek-debt-fears-pressure-futures-ahead-data/