(As of 7:38 am pacific)
Stocks open flat after recovering Monday with some of the
biggest gains of the year. Monday
snapped 2 weeks of trading losses with the Dow gaining 135 points and the
Nasdaq posting a 2.5% gain. Today,
markets opened flat with investors weighing Japan’s downgrade and anticipating a
US existing home sales report due out later this morning. The National Association of Realtors reported
a rise in sales to a seasonally adjusted annualized rate of 4.62 million, up
from a downwardly revised 4.47 million in March. Economists estimated a rate of 4.6
million. Sales rose 10% year over
year. It was the 10th
straight month of year over year gains. Fitch
Ratings downgraded Japan’s sovereign bond rating to A- from AA with a negative
outlook which means there is potential for future downgrade as well. Gold and the Japanese Yen fell as the US
dollar rose. Facebook continues to
dominate the US corporate news as shares continued to decline, down 18% from
the IPO price. Debate picks up on what’s
caused this decline including mishandling of lead underwriter Morgan Stanley
and the errors of the Nasdaq exchange. In Europe, the Stoxx 600 rose 1.24% snapping a
5 day losing streak on Monday, carried by gains in auto and resources
stocks. In economic news, the
Organization of Economic Cooperation and Development (OECD) cut its forecast
for growth in the euro-zone projecting a 0.1% contraction in 2012 returning to 0.9%
growth in 2013. The OECD also has taken
a supportive stance of the much talked about idea of joint issuance of
euro-bonds. In Asia, markets rallied on
the heels of Monday’s US gains.
Pro-growth comments from China’s Premier Wen Jiabao over the weekend held
up shares as investors swept in for bargain stocks. Oil was down 0.41% to 92.19 while gold shed
0.39% to 1583. The US dollar gained
against most major currencies while the 10 year treasury yield jumped 5.7 basis
points to 1.79%. 30 yr. mortgage rates
held at 3.79%. The CBOE Volatility Index
(VIX) was down 4.91% to 20.93 at 7:21 am pacific.
