Showing posts with label New York Stock Exchange. Show all posts
Showing posts with label New York Stock Exchange. Show all posts

Thursday, May 31, 2012

U.S. stocks fell Thursday morning, the worst losses of the year

U.S. stocks fell Thursday morning
Traders work on the floor of the New York Stock Exchange Wednesday, May 30, 2012.
NEW YORK (AP) -- U.S. stocks fell Thursday morning, promising another nerve-wracking day for investors who just endured one of the worst losses of the year.

The Dow Jones industrial average fell steadily throughout the morning and was down 89 points at 12,331 as of 11:15 a.m. It plunged 161 points the day before on concerns about Europe, marking its third-worst daily loss of the year. May will be the Dow's first monthly loss since September - another unwelcome milestone.

Stock index futures had climbed before the market opened after several big retailers including Target and Limited Brands reported healthy sales for May. Those gains evaporated after the government released discouraging news about jobs and economic growth.

The dismal month has been an unpleasant jolt after the gains in the first quarter, when investors wagered that Europe's financial troubles were, if not exactly solved, at least becoming more manageable. In the 21 trading days so far this month, the Dow has lost value on all but five. Its declines have wiped out nearly four-fifths of the gains made in the first three months of the year.

The Standard & Poor's 500 edged down eight to 1,305. The Nasdaq composite fell 22 points to 2,815.

News about U.S. stocks and bonds crimped the market, emphasizing the tenuous nature of any economic recovery here.

The government reported that claims for unemployment benefits rose to a five-week high, and that the economy grew more slowly than expected in the first three months of the year.

In bonds, the yield on the benchmark 10-year U.S. Treasury note fell to record low as investors flee the stock market and opt for low-risk bonds instead. The yield hit 1.54 percent in the morning, down from 1.62 percent the day before.

Caterpillar was the weakest stock in the Dow, down more than 3 percent in early trading. The machinery company is heavily dependent on China, and economists are concerned that the country, which has powered global economic growth as others have fallen into recession, is slowing down.

There was at least one encouraging sign in world markets. The yield on 10-year bonds for Spain fell to 6.4 percent after shooting as high as 6.7 percent on Wednesday.

That means investors are more confident in Spain's ability to pay its debt and aren't demanding as high an interest rate in return for investing in bonds issued by that country's government. Other countries like Greece and Portugal had to seek bailout loans after their borrowing costs rose above 7 percent, a level that many economists see as too high for a country to continue funding itself.

Debt-laden Greece has dominated the headlines out of Europe for much of the year, and investors are closely watching its elections on June 17 for signs of whether the country will keep using the euro or break away from the 16 other countries that do.

This week Spain has been the force that's rattling the market. The country announced Friday that it would have to spend nearly $24 billion to bail out a troubled bank, Bankia. On Thursday the European Union demanded that Spain provide more details about how it plans to finance an overhaul of its banking sector. Europe, which has already bailed out Greece, Ireland and Portugal, doesn't want to have to do the same for Spain as well.

Spain's size could make it an even bigger headache. Greece makes up 2 percent of the euro zone's economy; Spain 11 percent.

"Greece is a failed chemistry experiment," said Michael Strauss, chief investment strategist at the Commonfund investment firm in Connecticut. "But we are more worried about Spain because of its size and the scope."

Europe's debt crisis is sharpened by disagreement on whether spending more money or less is the best way to solve it. Stronger countries like Germany say governments need to cut spending. Weaker countries, already wracked by street protests whenever they try to cut any government services, say that will only make the problem worse.

In Ireland, residents voted on whether to accept a budget plan from the European Union. The plan would impose heavy budget cuts on the struggling country, a move that's sure to be unpopular among citizens who are used to generous government spending. But if Ireland rejects the EU's plan, its access to new bailout funds will be severely curbed. Results come Friday.

News by AP

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Wednesday, May 02, 2012

U.S. and Europe: Bad news about jobs spooks markets

U.S. and Europe: Bad news about jobs
Trader Christopher Morie works on the floor of the New York Stock Exchange
NEW YORK (AP) -- Investors are homing in on bad news about jobs in the U.S. and Europe.

Stocks are down at midday, erasing the hope generated the day before about a brisk May for the market.

The Dow Jones industrial average fell 48 points to 13,230 in midday trading Wednesday. The day before it closed at the highest point in four years.

The Standard & Poor's 500 fell seven points to 1,398. The Nasdaq composite index was down four at 3,045.

An unemployment report underscored worries about Europe's debt crisis. The 17 countries that use the euro reported that unemployment rose to 10.9 percent in March, the highest since 1999.

News by AP

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Wednesday, April 04, 2012

SEC probes exchanges' disclosure in broad inquiry

U.S. Stock Exchange
New York stock exchange
(Reuters) - Regulators are closely scrutinizing stock exchanges for failure to disclose material changes to their businesses, part of some 20 different areas of inquiry by the U.S. Securities and Exchange Commission into how the electronic marketplace works. The SEC is interested in everything from the type of orders that the exchanges have devised to allow their clients to execute trades, to whether they are properly self-policing their markets, according to people familiar with the matter.

The stepped-up inquiries, which center on a marketplace where trades are now executed at speeds far faster than a blink of the eye, were sparked by the "flash crash" in May 2010, which one official called a "game changer."

The agency is concerned the electronic exchanges may be conducting their business in a way that could provide certain clients preferential treatment.

The inquiries also coincide with an embarrassing technical glitch in March that derailed the much-anticipated initial public offering of one of the fastest-growing electronic exchanges, BATS Global Markets Inc. Failure to disclose could lead to enforcement actions by the SEC, although fraud or illicit conduct have not been a major focus, these people told Reuters. Exchanges need to disclose rule changes and get the SEC's approval. Disclosure issues tripped up exchange operator Direct Edge, which the SEC sanctioned in October after an affiliated routing broker engaged in proprietary trading, even though the exchange's rules forbade such transactions. It is also one element of the SEC's probe into BATS, which said in February that regulators sought information about certain order types and its communications with market participants. One person familiar with the matter said that the SEC is looking at whether BATS should have filed certain rules disclosing how its order types work, and also whether those order types may give some market participants an advantage over others.

BATS declined to comment. Exchanges act as self-regulatory organizations, which means they must police their own markets for abuse. The exchanges are called SROs because of that distinction. Exchanges must file SRO rules with the SEC any time a material change is made. Those rules are vetted through a public comment process, and the SEC can also intervene if it feels the proposed rule violates certain legal provisions, such as an anti-discrimination clause that prevents exchanges from favoring one group of clients over another. But over the years, as more exchanges have gone from member-owned organizations to profit-driven public companies, regulators say that the quest for profit has at times trumped self-regulatory responsibilities. Moreover, in today's world of multiple trading venues and trades measured in microseconds, the way things actually work on an exchange is not always properly communicated in an SRO's own rules. Historically, there have always been problems with exchanges at times failing to make the proper rule filings. However, after the flash crash the SEC stepped up its scrutiny of exchange oversight and started to discover repeated failures in this area. Now, the SEC has also become much more willing to recommend enforcement action for technical violations that in the past might have flown under the radar.

News by Reuters

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