News Column

Wall Street Mixed On Euro Concerns

June 5, 2012
Wall Street

U.S. stocks traded mixed on Monday, after huge sell-off last Friday, despite that global slowdown concerns and European debt crisis continued to haunt the market.

The big losses in equity market last Friday stimulated investors'speculation of further monetary stimulus measures by the Federal Reserve. Investors hoped that the Fed would implement the third round of quantitative easing policy (QE3) to battle with current market situation.

However, Art Cashin, UBS Financial Services' director of floor operations at the NYSE, told Xinhua reporter at NYSE that he doubted the effectiveness of QE3. He said that lower rates would not make a meaningful difference with banks currently sitting on trillions in excess reserves around the globe.

Monday was a light macro day. The Commerce Department said new orders for U.S. factory goods fell 0.6 percent in April, declining for the third time in four months as business expansions slowed down.

Stephen J. Guilfoyle, U.S. Economist at Meridian Equity Partners Inc. said that this week's focus would be the Fed's report. "Don't forget, the beige book will be released on Wednesday, and will surely be looked at even more closely than usual by traders as we inch toward that 20 June FOMC (Federal Open Market Committee) policy announcement," said Guilfoyle. "Will we see coordinated action by the planet's central banks? Chances are that the time is not yet upon us, but I won't rule it out until Thursday."

As for European situations, Herman Van Rompuy, the chairman of European Union leaders' meetings said on Monday the euro zone is likely to come up with a plan for deeper economic integration by the end of the year, after agreeing on what elements it should include and how to achieve it in June.

When the market closed, the Dow Jones industrial average lost 17.11 points, or 0.14 percent, at 12,101.46. The Standard & Poor's 500 added 0.14 points, or 0.01 percent, to 1,278.18. The Nasdaq Composite Index rose 12.53 points, or 0.46 percent, to 2,760.01.

As for dollars, the U.S. dollar traded mixed against major currencies in late New York trading on Monday as the euro rebounded after investors expected that European Union will take measures to prevent the debt crisis from spreading.

Crude prices rebounded from eight-month lows on Monday as hopes for economic boosting policies lifted the markets. Light, sweet crude for July delivery rose 75 cents, or 0.90 percent to settle at 83.98 dollars a barrel on the New York Mercantile Exchange, the first gain in five days. In London, Brent crude for July delivery also gained moderately and last traded under 100 dollars a barrel.

Source: Copyright Xinhua News Agency - CEIS 2012

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