While you were sleeping: Stocks drop on Greece worry
Nov 13 (BusinessDesk) – Equities sank as European finance chiefs met to discuss Greece's newly approved 2013 budget that
is seeking to appease conditions by international lenders to secure more funds and avoid defaulting on its debt.
A decision on releasing fresh funds is unlikely to be made today.
A draft document from the European Central Bank, the European Commission and the International Monetary Fund, known as
the troika, was obtained by Bloomberg News. Giving Greece a two-year extension to meet budget targets would ease the
impact of austerity measures, the troika said.
In Europe, the Stoxx 600 Index ended 0.3 percent lower. Shares dipped in London, Paris, Madrid and Milan. Germany's DAX
edged higher on the day.
Trading also was muted on Wall Street, where volume was thinned by the Veterans Day holiday that closed the US bond
market.
In afternoon trading in New York, the Dow Jones Industrial Average edged 0.06 percent lower, as did the Nasdaq Composite
Index, while the Standard & Poor's 500 Index slipped 0.17 percent.
While equities have suffered from concern about the negative impact of the so-called fiscal cliff on the pace of
economic recovery, some say this worry is overblown as they expect agreement on a plan to avoid it.
“It’s astonishing that now the market is turning so quickly and we don’t understand that,” Bettina Mueller, a money
manager in Frankfurt at Deutsche Bank's DWS Investments unit, which oversees about US$350 billion, told Bloomberg. “Our
expectation regarding the fiscal cliff is that both sides will come to a compromise.”
President Obama has called top Congressional leaders to the White House this week to kick start talks. Failure to agree
on a plan would trigger automatic tax increases and spending cuts worth US$607 billion on January 1.
"The markets don't like uncertainty and while the election is over, investors must still deal with the fiscal cliff, the
debt ceiling and the unpredictable situation in Europe," Randy Frederick, managing director of active trading and
derivatives at Charles Schwab, in Austin, Texas, told Reuters.
"But, keep in mind, the markets are clearly oversold in the short-term and even a hint of resolution on any of these
issues could spark a nice bounce," he said.
On the corporate news front, Leucadia National has agreed to buy the rest of Jeffries Group that it doesn't already own
at a price that values the investment firm at US$3.6 billion.
The International Energy Agency has revamped its forecasts and now says that the US is poised to become the world's
largest oil producer – ahead of Saudi Arabia – in four years, reflecting the recent surge in shale gas production.
(BusinessDesk)