Fed Minutes, China Slowdown, Europe Crisis Impact on Wall Street

With Spanish banks working out bailout details, Europe’s debt crisis, the sluggishness of the US economy, and China’s growth slow-down, investors are being very cautious at present. Financial analysts note that US second quarter corporate earnings which have started trickling in are not likely to boost investor confidence. Research firm S&P Capital IQ estimates that companies in the S&P 500 will report a 2 percent drop in the second quarter compared with the same period in 2011. If this should prove true it would reportedly be the first drop in second quarter profits since 2009.

Rising 1.4 percent, energy stocks were the leaders of the ten industry groups represented in the S&P 500 index. Exxon Mobil climbed $1.27 to $84.38, while Chevron gained 97 cents to $104.85. High demand for Treasurys has had the effect of keeping the US government borrowing rates low. Wednesday afternoon the Treasury auctioned 10-year notes at 1.46 percent – a record low.

With investors nervous of uncertain economic conditions, IPOs dropped 34 percent during the second quarter of 2012. Globally companies raised $41.3 billion by selling shares, compared with the $62.7 billion raised in 2011 for the same period.