It's been a week of ups and downs in the U.S. stock market, as investors have been watching developments in Europe while digesting mostly positive news in the United States.
With all eyes focused on Cyprus, U.S. stocks have taken a pause from the rally that has been underway since early November. The Dow has been bouncing around 14,500 while the S&P 500 has been drifting between 1,550 and 1,560, just below its all-time high from October 2007.
After falling on Monday and rebounding on Tuesday, all three major U.S. indexes were back in the red Wednesday as banks in Cyprus are set to open their doors Thursday for the first time since March 16. Worries about Cyprus have reignited fears about other troubled countries in the eurozone, including Greece, Spain and Italy.
The Athens stock exchange tumbled 4% Wednesday, while Spanish and Italian stocks dropped about 1%.
The pressure in the markets gave Stocktwits users plenty to chatter about.
So the Greek stock market is officially crashing? This constitutes a crash right? down over 25% since last month? si o no?
It's certainly a sharp pullback. But of course, Greece's stock market is up more than 80% from its low in June 2012.
Investors have been flip-flopping lately. CNNMoney's Fear & Greed index ticked down 8 points overnight, showing that investors are now in 'Greed' mode, compared to 'Extreme Greed' earlier this week.
That's a good point. While stocks have taken a breather from the rally, they're not even close to down and out. But even though investors aren't really seeking safety in ADT Corp., they are continuing to pad their portfolios with Treasuries. The yield on the 10-year Treasury has fallen to 1.86% from almost 2% a week ago.
That's fair. Experts continue to make the point that even though the U.S. economy is still struggling with high unemployment, sluggish growth and a dysfunctional government, it has benefited from the Federal Reserve's stimulus policies over the last few years, and it's in much better shape than other countries.
And as long as that continues, the U.S. stock market stands to benefit, said Gary Thayer, chief macro strategist at Wells Fargo Advisors. He emphasized that even during the past few weeks, the U.S. stock market has held up better than many of its foreign counterparts, particularly emerging markets.
Italy's borrowing costs continue to fall as investors bet the European Central Bank will backstop the nation's massive bond market.
The Italian government sold €2.9 billion worth of 10-year bonds Thursday at a yield of 4.45%, down from 4.92% at the previous auction in October. It also sold €3 billion of 5-year notes at a yield of 3.23%, compared with 3.80% last month. Yields and prices move in opposite direction.
In the MOREBen Rooney - Nov 29, 2012 10:38 AM ET
Following years of setbacks and shortfalls, efforts to stabilize the euro currency union finally appear to be taking shape, with policymakers scoring two key victories in as many weeks.
"It's encouraging to see, but all these measures were necessary to preserve the status quo," said Marie Diron, senior economic adviser at Ernst & Young in London. "Without these things, the situation would have been quite dire, but we've learned to be MOREBen Rooney - Sep 14, 2012 7:44 AM ET
Billionaire financier and political activist George Soros said Germany should lead the European Union in a different direction, or be persuaded to leave the euro currency so other nations can move forward.
"In my judgment the best course of action is to persuade Germany to choose between becoming a more benevolent hegemon or leaving the euro," Soros wrote in an essay published in the New York Review of Books Monday. "In MOREBen Rooney - Sep 10, 2012 10:56 AM ET
Spain suffered the highest level of joblessness in the eurozone in July, as overall unemployment in the region held steady at a record high.
One out of every four citizens in Spain is unemployed, according to the latest statistics from Eurostat. The situation is even worse for young Spaniards. The unemployment rate for those under 25 years old is now approaching 53%.
Spain has been dealing with high unemployment for years. The MOREBen Rooney - Aug 31, 2012 11:23 AM ET
As the eurozone economy continues to falter, German business owners are growing increasingly pessimistic about the future.
The Munich-based Ifo Institute said Monday that its Business Climate Index fell in August for a fourth consecutive month.
The gloomy mood among German firms comes as economic activity across the 17-nation euro area has slowed. In the second quarter, eurozone gross domestic product declined 0.2% from the prior quarter, according to initial estimates.
While the MOREBen Rooney - Aug 27, 2012 11:48 AM ET
The eurozone economy continues to limp toward another recession as business activity stagnates, according to data released Thursday.
A key manufacturing index showed activity across the eurozone contracting for the seventh straight month in August. The Markit composite Purchasing Managers Index was virtually unchanged from July at 46.6. Any reading below 50 signals contraction.
Output declined in both the manufacturing and services sectors. And incoming new business orders fell for the 13th MOREBen Rooney - Aug 23, 2012 11:04 AM ET
Spain and Italy came under renewed pressure in the bond market Friday after the European Central Bank said it would not buy government bonds unless specific conditions are met.
One week after he said the ECB would do "whatever it takes" to support the euro currency, ECB president Mario Draghi said Thursday that governments, including those in Spain and Italy, must first ask the eurozone bailout funds to buy bonds before MOREBen Rooney - Aug 3, 2012 7:34 AM ET
After the Federal Reserve declined to spike the punchbowl Wednesday, fans of monetary stimulus are now entirely dependent on the European Central Bank for a fix.
In leaving its policies unchanged, the Fed gave investors what they expected, but not what they wanted. Now, all eyes are turning to Frankfurt, where top ECB officials will meet Thursday for their monthly policy discussion.
ECB president Mario Draghi raised the stakes last week when MOREBen Rooney - Aug 1, 2012 3:48 PM ET
One day after Moody's lowered its outlook for Germany's credit rating, the nation sold 2.32 billion euros worth of ultra long-term bonds.
The average yield at Wednesday's auction of 30-year bunds was 2.17%, down from 2.41% at the last such auction in April. The drop in yield, which falls when prices rise, suggests that demand remains strong. However, the amount sold was below the 3 billion euros offered by the German MOREBen Rooney - Jul 25, 2012 11:41 AM ET
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