Sun, Feb 12, 2012 - Page 10 News List

Greece woes end US stocks’ winning run

AFP, Washington

A five-week streak of gains on US markets ended on Friday after revived worries that Greece will default on its mountain of debt sent stocks falling.

Clear signs that Athens was close to a political deal that would enable a huge debt restructuring and new EU bailout boosted stocks over the first four days of the week.

However, the gains were wiped out on Friday as cracks in the deal appeared, both from the Greek side and EU side, leaving the Dow Jones Industrial Index to close at a 0.69 percent loss for the week, at 12,801.23.

The broad-based S&P 500 gave up the same amount for the five days to end at 1,342.64, while the tech-heavy DASDAQ Composite lost 0.80 percent to 2,903.88.

A mixed but mostly -unimpressive bunch of company results, closing out the middling fourth quarter reporting season, failed to give investors cause to ignore the turbulence in the eurozone.

“It was a European week,” Evariste Lefeuvre of Natixis said. “What took place in Greece was very important because there were not a lot of significant statistics or company results.”

Friday’s downturn was also a response to trade data in China that underscored that economy’s slowdown, which hit resource-tied stocks like Alcoa that depend on Chinese industrial demand for growth.

However, the indices were still solidly up for the year-to-date, the Dow 4.8 percent higher, the S&P 6.8 percent and the NASDAQ 11.5 percent.

Most analysts saw more of the same for next week, as the Greek bailout remained in the balance late on Friday and time was running out for the country to beat a crucial debt payment date.

Another expected down-the-wire political battle on extending US payroll taxes before the end of this month will also keep markets on edge, with both Republicans and Democrats looking to score political points as the presidential election campaign heats up.

Key data releases coming up next week include retail sales and business inventories from last month on Tuesday, industrial production on Wednesday, producer prices on Thursday and consumer prices on Friday.

Expectations are for a slight pickup in prices, but nothing that would move the US Federal Reserve to reconsider its ultra-low interest rate policy.

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