Stocks around the globe returned to positive territory Thursday, a day after European fear sparked steep losses. Europe's woes, however, remain a clear and present danger to the fragile U.S. economic recovery.
U.S. blue chips had fallen almost 400 points Wednesday on fears that soaring borrowing costs for Italy could push it into a crippling debt default. Those fears waned a bit Thursday as a new coalition government seemed to be taking form and there was more clarity from Italian lawmakers over promised economic reforms.
Borrowing costs remain elevated for Italy, a nation with a $2.6 trillion deficit and about $300 billion in borrowing needs over the next year or so. On Wednesday, Italy was forced to pay investors a 7.6 percent rate of return on its 10-year bonds, well above the 7 percent threshold at which other European nations were forced to seek rescue packages.
Investors eased up on Italy on Thursday, and the rate of return on the benchmark 10-year bond fell to 6.873 percent, slightly below the danger zone.
With Italy calming, U.S. stocks recovered some lost ground. The Dow Jones industrial average closed up 112.92 points to 11,893.86, while the S&P 500 rose by 10.60 points to 1,239.70. The NASDAQ gained 3.50 points to end at 2,625.15.
Full Story
No comments:
Post a Comment