It was a wild and willy day on Wall Street. All 3 sectors started way down, the Dow being as low as negative 200 in the early morning after more bad job numbers came out for first time filers of unemployment.
As the day advanced, things started picking up as President Obama announced the US and other nations will release 60 million barrels of oil from emergency reserves.
The roller coaster continued as the Dow rallied in the late afternoon on positive news on Greek austerity.
The top financial news for today were:
1)Stocks dip as job market worries continue-From the AP
What began with a steep drop in the stock market ended with a modest decline Thursday. The Dow Jones industrial average lost just 60 points after being down nearly 240 points earlier in the day.
A jump in the number of people applying for jobless benefits and plummeting oil prices drove stocks lower at the market open. By 11 a.m., the Dow was down 234 points. Then came late afternoon reports that Greece may have reached a deal for a new austerity plan. The Dow made up nearly 100 points between 2:45 and 3 p.m. alone.
The Dow finished with a loss of 59.67 points, or 0.5 percent, to 12,050. The Standard & Poor's 500 index, down as many as 24 points, closed down just 3.64, or 0.3 percent, to 1,283.50.
Since late April, reports on manufacturing, retail sales, home sales and other economic indicators have come in weaker than economists anticipated. Europe's debt problems and a slowing growth rate in China have also raised concerns about the global economy. On Wednesday, Federal Reserve Chairman Ben Bernanke said problems plaguing the economy may last longer than previously thought.
As a result, the stock market has fallen six of the last seven weeks. The S&P 500 is down 5.9 percent from its high for the year of 1363.61 in April.
"This is no longer looking like a small soft patch. It's beginning to look more like quicksand," said Lawrence Creatura, a stock portfolio manager at Federated Investors.
The continued rise in first-time claims for unemployment benefits indicated little improvement in the job market since May, when there was a drop in the number of new jobs created. New applications for unemployment benefits rose to 429,000 last week, from 420,000 the week before.
"400,000 is the magic number and we've been above it for 11 weeks," Creatura said.
2)Oil sinks after IEA moves to release reserves-From Marketwatch
Crude futures slumped Thursday after the U.S. and other members of the International Energy Agency said they will release 60 million barrels of oil into world markets in the coming month to counter lost production in Libya.
The United States will release half of the 60 million barrels of oil. The product will come from the Strategic Petroleum Reserve, which stands at capacity and at its highest level ever holding 727 million barrels.
This is the third time in the IEA’s history that its members have decided to release stocks, the latest time being the aftermath of hurricanes Rita and Katrina in 2005.
3)EU Stops Greek Backtracking-From The Wall Street Journal
European Union leaders fended off an effort by Greece to water down an austerity and privatization package that is the price for new aid, and EU President Herman Van Rompuy said they were nearing approval on a new rescue program to take Athens until the end of 2014.
"Very important decisions have been taken," Greek Prime Minister George Papandreou said in a statement at the end of the first day of a two-day summit. "We have secured the support of our [EU] partners and this is not just a green light, it's a positive sign for the future of Greece."
EU leaders were confronted earlier in the week with an effort by Greek officials to soften the austerity plan, which would have left a €5.5 billion ($7.9 billion) shortfall.
But on Thursday, a negotiating team in Athens, comprising officials from the EU and the International Monetary Fund, secured an agreement covering the gap, according to a Greek official.
"We have a deal after the Greek government agreed to more spending cuts and some higher taxes," said the official.
The official said the deal was reached after Greece agreed to lower the minimum taxable income for Greek taxpayers to €8,000 ($11,500) from €12,000, and agreed to a special crisis levy on all taxpayers, ranging between 1% and 5%, depending on income. The government had previously expected to cap that levy at 3% or 4%.
News of an agreement helped the euro rally. In a joint statement, officials from the European Commission, the IMF and the European Central Bank—the so-called troika—said they had reached with the Greek authorities "a satisfactory agreement on a set of measures to close the fiscal gap for the years 2011-2014."
Quote of the Day from Dave Ramsey.com:
Failure is not a single, cataclysmic event. You don't fail overnight. Instead, failure is a few errors in judgment, repeated every day. — Jim Rohn
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