Stocks fall over Euro Bank concerns U.S. Stocks Decline as Concern Grows Over European Banks’ Capital Needs
U.S. stocks fell, after yesterday’s rally, as concern grew that European banks may need to raise more capital amid the region’s sovereign debt crisis.
The Standard & Poor’s 500 Index (SPX) slid 0.2 percent to 1,273.96 at 9:31 a.m. in New York.
“If you take the U.S. on its own, you’d have to feel that there is a sustainable nature to the data that we’ve gotten, which is very good for confidence,” Peter Kenny, a managing director in institutional sales at Knight Capital Group Inc. inJersey City, New Jersey, said in a telephone interview. “But the counterbalance to that is the risk presented by the euro-zone.”
The S&P 500 lost 0.04 point to 1,257.60 in 2011, the smallest annual change since 1947. The benchmark gauge for U.S. equities surged 14 percent from last year’s lowest level on Oct. 3 through Dec. 30 as better-than-estimated economic data fueled optimism the world’s largest economy can shrug off concern overEurope’s sovereign-debt crisis. Stocks rallied 1.6 percent yesterday, sending the Dow to the highest level since July, amid signs that manufacturing output is increasing from China to Australia and America.
Global stocks fell today as UniCredit SpA, Italy’s largest bank, said it will sell new shares in a 7.5 billion-euro ($9.8 billion) offer to strengthen its capital position. The European Central Bank reported overnight deposits from financial institutions rose to an all-time high and Luxembourg Prime Minister Jean-Claude Juncker said the European Union is facing a recession of unknown scope.
Bond Sale
Germany sold 10-year bonds today, getting more bids than the amount for sale and kicking off a competition for financing that may determine whether euro-area leaders can preserve the single currency.
In the U.S., a Commerce Department report at 10 a.m. New York time may show that bookings for factory equipment (TMNOCHNG) climbed 2 percent in November after a 0.4 percent drop the previous month, according to the median projection of 57 economists in a Bloomberg News survey. Another report may show domestic vehicle sales decreased in December to 10.42 million from 10.53 million in the previous month.
To contact the reporters on this story: Ksenia Galouchko in New York at kgalouchko1@bloomberg.net; Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net