Proposed Eurozone Bailout Impacts Wall Street
Intraday movement of US indexes on Wednesday saw the Dow briefly reach a positive reading for the year, while all three – the Dow, S&P 500 and Nasdaq Composite – were up by around 2 percent before dropping back before close of day. End of the day readings revealed that the Dow had climbed 102 points, the S&P 500 gained 12 points, and the Nasdaq added 22 points, being 0.9 percent, 1 percent and 0.8 percent respectively. Following the heart-wrenching drop in stocks on 3 October, to the lowest level in over a year, all three indexes have climbed between 8 and 11 percent. Wednesday was the 5th out of the last seven days for an advance in the Dow, while for the S&P 500 and Nasdaq, it was the 6th day of seven.
The effect of hopes for a resolution of Europe’s debt crisis was most evident on financial stocks, with JP Morgan Chase, Citigroup, Bank of America and Wells Fargo all up between 2 and 5 percent. As revealed in a survey by CNN Money, more than 80 percent of the experts giving their opinions noted that overseas debt problems are creating challenging circumstances for US stocks. With the proposed bailout requiring approval from all seventeen Eurozone nations, Slovakia proved to be the fly in the ointment as they voted against putting the plan into action. With the Slovakian government in a state of flux, it is anticipated that a positive vote may still come through before the end of this week, with Wall Street investors no doubt hopeful of a positive ripple effect in US markets.