U.S. stocks are little changed amid concern over Europe crisis
U.S. STOCKS WERE little changed after falling the most since June on Tuesday amid concern over the European debt crisis.
BLOOMBERG FILE PHOTO/TIM BOYLE
By Inyoung Hwang Bloomberg News
NEW YORK - U.S. stocks were little changed, after the Standard & Poor’s 500 Index dropped the most since June yesterday, amid concern Europe’s debt crisis is worsening.
The S&P 500 slid 0.1 percent to 1,440.43 at 9:33 a.m. in New York. The benchmark gauge fell 1.1 percent yesterday.
“People are facing up to the macroeconomic background,” said Andreas Utermann, global chief investment officer at Allianz Global Investors, which oversees $360 billion, on Bloomberg Television in London. “There is a significant risk that the announcement of any quantitative easing, rather than reassure people, gets people to understand that central banks are desperate and that is a serious situation.”
Stocks worldwide fell as Germany, the Netherlands and Finland said late yesterday Spain should bear the cost of problems in their banks, with the European Stability Mechanism assuming only a limited burden in recapitalizations. The Bank of Spain said the economy kept falling at a “significant pace” in the third quarter.
The Stoxx Europe 600 Index is down 1.5 percent, the most in two months, and the euro is trading near a two-week low as political uncertainty and weakening economic data in the currency bloc underscored the deepening impact of the sovereign- debt crisis.
U.S. equity indexes fell yesterday from their highest levels in almost five years as Federal Reserve Bank of Philadelphia President Charles Plosser said new bond buying announced by the Fed this month probably won’t boost growth or hiring. All 10 groups in the S&P 500 retreated.
The S&P 500 has erased almost all its gains since the Federal Open Market Committee said Sept. 13 that it will undertake a third round of quantitative easing by purchasing mortgage-backed securities at a pace of $40 billion per month until labor markets “improve substantially.” Policy makers are using unconventional tools to attack a jobless rate stuck above 8 percent since February 2009.
Both the S&P 500 and the Dow average are still near their all-time highs of October 2007 after both the Fed and the European Central Bank approved unlimited bond-buying programs. The Dow needs to rise 5.3 percent to reach its peak of 14,164.53, while the S&P 500 needs an increase of 8.6 percent to reach its record of 1,565.15.
U.S. data today may show purchases of new houses increased to a two-year high in August driven by lower borrowing costs, according to the median estimate in a Bloomberg survey.
Sales climbed to a 380,000 annual pace from a 372,000 rate in July, the Commerce Department may report. New houses made up 6.7 percent of the residential market in 2011, down from a high of 15 percent during the boom of the past decade.