Stocks were up and down today but finished higher at the close with the minute by minute European situation causing the fluctuations.
Italian Prime Minister Silvio Berlusconi agreed to resign today but the Italian and Greek debt problems have not been solved.
Supposedly jobs are getting just a bit easier to find. For each U.S. job opening at the end of September, there were 4.2 people looking for work. That was down from a year earlier, when there were 5.4 job seekers for every opening, and the fewest since December 2008.
Here are the top financial stories of the day:
1) Wall Street Ends Up After Italy Vote-From The New York Times
Stocks gyrated Tuesday before ending up on a day of dramatic political developments in Italy, the latest country to come under fire in the drawn-out euro zone debt crisis.
Powered by an early rally in Europe, the stock market in the United States rose slightly before a budget vote in Italy that had taken on immense importance for the prime minister, Silvio Berlusconi, after the recent defections of several lawmakers in his party. It passed with numerous abstentions, but Mr. Berlusconi lost his absolute majority.
Stocks then declined or were flat in afternoon trading until about two hours before the end of the session, when news that Mr. Berlusconi had offered to resign — after Parliament passes an austerity package — first emerged.
At 4 p.m., the Dow Jones industrial average was up 0.8 percent, or 102 points, to 12,170. The broader Standard & Poor’s 500-stock index was up 1.2 percent to 1,276, and the technology-heavy Nasdaq composite index was up 1.2 percent to 2,727.
There were no big reactions in credit markets, however. Italian 10-year bonds remained above their 6.7 percent yield, close to the level that forced other countries such as Greece to seek bailouts.
Investors have long been concerned that the debt ills in some of the smaller euro zone nations could spread to those with much bigger economies which would be much harder to fix. They have been focusing on Italy of late because of concern about its high debt load, rising borrowing costs and stagnant economy. Interest rates on the country’s debt have hit their highest levels since the country joined the euro zone more than a decade ago.
“With all of the debt they have to rollover it is extremely detrimental,” said Laura LaRosa, the director of fixed income at Glenmede, adding that the “domino effect” is “absolutely what seems to be happening now.”
The Treasury’s benchmark 10-year note yield was 2.09 percent after the news of the resignation, compared with 2.02 percent on Monday.
Earlier in Europe, stocks closed higher. The Euro Stoxx 50 index, a barometer of euro zone blue chips, was up 1.2 percent. The German DAX was up 0.6 percent and the CAC 40 in Paris rose 1.3 percent. The FTSE 100 index in London was 1 percent higher.
“The equity markets are generally rallying in Europe because they are hopeful resolving the political crisis is a necessary solution to resolving the European crisis,” said Jürgen Odenius, the chief economist at Prudential Fixed Income.
“The bond market remains bearish on this issue,” he added.
The euro was $1.3826, compared with $1.3758 on Monday.
2) Berlusconi resignation adds to Italian and Greek debt dramas-From CNN Money
Italian Prime Minister Silvio Berlusconi agreed to resign Tuesday, adding to the drama surrounding Greek and Italian sovereign debt issues.
Berlusconi's announcement came just hours after the Italian parliament reluctantly passed a budget reform measure with virtually all lawmakers present voting for the measure. But a majority of the 630 lawmakers abstained from the vote to show their unhappiness with the government.
If the measure had failed European support for Italy's sovereign debt could have vanished, causing an immediate crisis in the eurozone's third-largest economy. But the loss of a majority was enough to force Berlusconi's hand.
His departure could come as late as the first week of December, after a final vote on the budget. But he could be forced out sooner if investors drive up the interest rates on Italian bonds before then.
"The hope will be that Italy can quickly gain a new government with the stomach and the ability to implement major structural reforms," said Ben May, European economist with Capital Economics, in a client note. "But this alone will not solve Italy's woes."
Yields on Italy's 10-year notes, which have been well above 6% this week, shot back to close at 6.77%, with the spread to German debt increasing to a record of just under 5 percentage points. And stocks still struggled to maintain earlier gains in both Europe and the United States.
The situation in Greece also is still not resolved, as political leaders there struggled to form a coalition government in the wake of Prime Minister George Papandreou's resignation announcement Sunday.
Italy's problems are bigger than Berlusconi
Papandreou had announced he would step down in a bid to save the European bailout deal for Greece reached at the end of last month. European finance ministers, who met Monday to discuss the Greek and Italian situations, said the move was an important step to keeping the bailout deal on track.
"We welcome the intention of Greece to form a national unity government," said Luxembourg Finance Minister Jean-Claude Juncker, who leads the group of eurozone finance ministers, in a late-night statement Monday. "We underlined the importance of sustained cross-party support for the program in Greece."
Juncker said that executives of the so-called troika, the European Central Bank, the International Monetary Fund and the European Union, were set to return to Athens as soon as the new Greek government was in place. That means Greece could get the money it needs to avoid default by the end of the year.
The debt crisis and the impact it's had on the global financial system is being closely watched by investors and policymakers around the globe.
Mark Carney, the head of Canada's central bank, warned Tuesday that the global financial system is at risk of a new liquidity crisis due to European banks having to deleverage in response to sovereign debt problems.
"We are on the cusp of another retrenchment," he said in a speech in London. "There are steps that can be taken to mitigate, but not eliminate, the negative effects of the current wave. How European banks choose to delever will determine which ones authorities around the world need to take."
Carney was appointed last week as chairman of the Financial Stability Board, which has been charged by the G20 to coordinate global financial reform and monitor progress.
3) More Job Openings Signal Improving Labor Picture-From The Wall Street Journal
U.S. employers say they are looking to fill a growing number of openings as the economic recovery slowly regains traction, the latest sign of improvement in the still-weak labor market.
The U.S. had 3.4 million job openings at the end of September, up from 3.1 million in August, the
Labor Department said Tuesday. The increase was the largest in seven months. The job-openings rate—which measures openings for full- and part-time jobs relative to the total employed—was 2.5%, the highest since August 2008.
The figures suggest employers remain confident that demand will grow slowly but steadily in coming months. What's more, the data are from September, when headlines were dominated by turmoil in Europe, stock-market volatility and worries about another possible recession. That suggests employers think the recovery won't be easily sidetracked by external shocks.
The figures hardly reflect a hiring spree, and job openings remain far below their level before the latest recession. Economists cautioned that the figures indicate a still-sluggish recovery.
"Business has done a lot of cutting and got as lean as they could get," said Alan Levenson, chief economist at T. Rowe Price Associates. "Job openings are still at low levels in many industries."
He said the rise in job openings in September didn't appear to be due to a single factor. Many economists say growth in the third quarter was largely due to consumers and businesses playing "catch up" after being slowed earlier in the year by a jump in gasoline prices and supply disruptions related to the Japanese earthquake.
The rise in job openings won't necessarily lead to a big net increase in employment. State and local governments continue to shed workers, offsetting a hiring trend in the private sector, according to government-employment figures for October. Moreover, many companies say positions remain unfilled not because of a lack of applicants but because they can't find candidates with the right skills.
New York-based Agro Farma Inc. is one of the companies hiring. The maker of Chobani, a brand of Greek-style yogurt, has begun filling 400 new positions for a plant in Twin Falls, Idaho, set to open next June. The company is also adding 450 new workers to its main plant in South Edmeston, N.Y.
Chobani President Hamdi Ulukaya said the company, begun in 2007, has capitalized on Americans' increasing appetite for health foods that taste good, and that sales are expected to more than double this year. "The brand is on fire…and we need to do what we have to do to keep it going," Mr. Ulukaya said.
Quote of the Day from Dave Ramsey.com:
Leaders get out in front and stay there by raising the standards by which they judge themselves – and by which they are willing to be judged. — Fred Smith
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