Stock market recovers after shaky start to week

21st November 2007, Comments 0 comments

21 November 2007, MADRID - The stock market recovered partially Tuesday from Monday's steep sell-off but offered few signs that it was operating under its own steam. Instead, investors remained fixated on what was happening in New York, and when the Dow opened higher, they rapidly followed suit.

21 November 2007

MADRID - The stock market recovered partially Tuesday from Monday's steep sell-off but offered few signs that it was operating under its own steam. Instead, investors remained fixated on what was happening in New York, and when the Dow opened higher, they rapidly followed suit.

The higher opening of Wall Street, which remained in positive territory until the close in Europe, allowed many to reconsider their perhaps rash decisions taken during the panic selling the previous day, particularly in light of analysts' expectations for a cut in US interest rates.

Those expectations were based in part on the evolution of 10-year bond returns in the United States, which at mid-session hit 4.08 percent, down from 4.21 percent the previous week.

In Europe, meanwhile, similar signs have emerged as bond yields have declined in recent weeks, although yesterday the return on both Spanish and German bonds increased slightly. Few analysts on this side of the Atlantic think the ECB will move to cut rates too soon, especially while inflation remains an issue.

The Ibex 35 closed with a gain of 1.03 percent at 15,700 points, remaining well within the support and resistance levels established in previous sessions, and putting it on a lateral trend.

However, in the United States, the market turned south after the European close when minutes from the Federal Reserve's Open Market Committee meeting in late October were published.

The report points to lower US growth forecasts for 2008 with credit market woes and a slowdown in the housing sector cited as the principle factors to blame. Other data released yesterday showed that the number of houses being built in the US in October increased 3 percent, but the number of permits issued for new homes fell 6.6 percent.

[Copyright EL PAÍS, SL./ RAFAEL VIDAL 2007]

Subject: Spanish news

 

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