Wall Street stays flat ahead of vote
US stocks were little changed yesterday, with major indices seesawing between gains and losses before a key vote by Slovakia on expanding the Eurozone rescue fund.
The back-and-forth moves on Wall Street follow several days of sharp gains. The S&P 500 has risen 8.7 per cent over the past five days, its biggest five-day move since March 2009, as stocks recovered from steep losses tied to worries about the Eurozone debt crisis.
Markets have been reacting to news from the Eurozone where officials are trying to contain a debt crisis that threatens large European banks and global financial stability.
“It’s been the biggest problem on the front burner for the US,” said Bruce Bittles, chief investment strategist at Robert W Baird & Co in Nashville. “It looks like it’s being diffused.”
With 16 of 17 Eurozone states having ratified a pact to boost the size and powers of the European Financial Stability Facility bailout fund, all eyes turned to Slovakia. The country’s finance minister said the country was expected to approve the changes this week.
Slovakia’s refusal last night to back the plan intended to head off crisis could give the market an excuse to sell. Stocks have reached the top of a recent range, hitting resistance around 1,195 on the S&P 500.
With earnings season beginning after the close of trading with Alcoa profit report, investors hoped for more gains.
The Dow Jones industrial average was down 17.33 points, or 0.15 per cent, at 11,415.85. The Standard & Poor’s 500 Index was down 0.66 point, or 0.06 per cent, at 1,194.23. The Nasdaq Composite Index was up 8.21 points, or 0.32 per cent, at 2,574.26.
Alcoa, the largest US aluminium company, was up 2.6 per cent to $10.35, making it the best performer on the Dow.
“Expectations are so low that Alcoa doesn’t have to say a lot in order to beat expectations,” said King Lip, chief investment officer at Baker Avenue Asset Management in San Francisco.
In the past week, analysts have lowered their consensus earnings estimates for Alcoa, citing a precipitous drop in metals prices in recent months sparked by global economic concerns.
About 2.87 billion shares were traded on the New York Stock Exchange, NYSE Amex and Nasdaq, lower than average.