US indexes finished slightly higher Wednesday, recouping early losses as better-than-forecast earnings eclipsed concerns over Europe’s debt crisis ahead of tomorrow’s European Central Bank meeting in Frankfurt.
Equities had slumped earlier amid concerns Europe’s debt crisis may get worse. An opinion poll in Italy showed former Premier Silvio Berlusconi’s anti-austerity campaign has boosted his popularity before this month’s general elections. Berlusconi’s proposals go completely against the policies implemented by the current technocrat Prime Minister Mario Monti, who has accused Berlusconi of trying to buy votes.
Meanwhile, European Central Bank officials are set to meet Thursday while euro-area leaders will gather for a summit in Brussels amid widespread concerns over a rising currency. Greek finance minister Yannis Stournaras today expressed concern over the recent gain in strength of the euro. French President Francois Hollande had voiced concern about the currency’s rapid appreciation yesterday.
The Dow Jones Industrial Average (DJIA) added 8 points while the S&P 500 Index (SPX) rose 1 point after the usual afternoon rebound with defensive sectors like telecoms and utilities fronting gains among its 10 business groups.
Treasury prices rose Wednesday, pushing yields lower from almost the highest level since April, as growing political uncertainty in Italy increased the allure of US safe-haven assets.
The benchmark 10-year Treasury yield fell four basis points to 1.96 percent while yield on 30-year Treasury bonds declined four basis points to 3.17 percent.
Meanwhile, the euro tumbled on Wednesday as an opinion poll showed former Italian Prime Minister Silvio Berlusconi’s political coalition making advances, putting the incumbent PM Mario Monti’s reforms efforts at risk.
Across the Atlantic, European stocks declined on Wednesday as political uncertainty in Italy weakened sentiments across the continent.
A recent opinion poll showed the anti-austerity campaign of Silvio Berlusconi has boosted the former Prime Minister’s ahead of this month’s general elections. Berlusconi has promised to cut taxes and end a levy on first homes implemented by present PM Mario Monti.
Investors also chose to move to the sidelines ahead of the ECB’s monetary policy meeting on Thursday.
In the euro area, German Deputy Finance Minister Steffen Kampeter said Berlin will not block aid for Cyprus so long as Nicosia fulfills the criteria for aid from Europe’s bailout funds. This is Germany’s strongest signal that Europe’s biggest economy will not jeopardise the currency bloc’s future that could happen from any rejection of help for the Mediterranean nation.
Our Trend Tracking Indexes (TTIs) bounced a bit and reached the following levels:
Domestic TTI: +3.21%
International TTI: +11.47%
Contact Ulli