By Rita Nazareth - Mar 6, 2012 9:31 PM GMT+0700
U.S. stocks fell, sending the Standard & Poor’s 500 Index lower for a third day, after a report showed that Europe’s economy contracted and as investors watched developments in a Greece swap deal.
The S&P 500 (SPX) lost 0.8 percent to 1,353.68 at 9:31 a.m. New York time.
March 6 (Bloomberg) -- Michael Purves, chief market strategist at BGC Financial LP, talks about U.S. stocks. Purves speaks with Erik Schatzker and Stephanie Ruhle on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
March 6 (Bloomberg) -- Brian Rogers, chairman and chief investment officer of T. Rowe Price Group Inc., talks about the outlook for the stock market, investor sentiment and investment strategy. Rogers speaks with Sara Eisen and Erik Schatzker on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
“It comes down to two things,” said Kevin Caron, a market strategist in Florham Park, New Jersey, at Stifel Nicolaus & Co, which has more than $119 billion in client assets. “Most of the data thus far appeared to be moving in the right direction, which explains why the market performed better. No. 2, why the market is not moving higher today? The weaker-than-expected data and some nervousness around the Greece debt swap.”
The S&P 500 has risen 8.5 percent in 2012 through yesterday amid better-than-estimated economic data and expectations Europe would tame its debt crisis. The index yesterday completed its biggest two-day drop since January on concern that this year’s rally has outpaced economic prospects. The S&P 500 traded near 14 times earnings, the highest valuation level since August.
Global stocks fell as Europe’s economy contracted in the fourth quarter after investment, exports and consumer spending dropped. The private investors that so far declared their participation in Greece’s debt restructuring hold about 20 percent of the bonds involved in a swap required for an international bailout. The goal of the swap, which runs through March 8, is to reduce by 53.5 percent the total of privately held Greek debt, helping avert an uncontrolled default.
The European Central Bank’s balance sheet surged to a record 3.02 trillion euros ($3.96 trillion) last week, 31 percent bigger than the German economy. Lending to euro-area banks jumped 310.7 billion euros to 1.13 trillion euros in the week ended March 2, the Frankfurt-based ECB said in a statement.
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
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