New York - Stocks fell Wednesday along with the euro as
hopes deflated that an EU summit this week will generate a comprehensive deal
for the bloc’s debt crisis.
Commodities also fell, led by losses in copper and oil. Investors
reached out instead for U.S. Treasuries and relative safe-havens like the
dollar. U.S. longer-dated Treasury debt prices turned higher as doubts also
began to grow that many European nations would be able to stave off a threatened
ratings downgrade by Standard & Poors. Optimism ha d risen in recent days
that European officials would craft a bold plans at the summit beginning Friday.
French officials had even said that French and German leaders will not leave the
summit until a “powerful” deal was reached to tackle the crisis.
But a German government official, speaking on conditions of
anonymity, said Berlin was increasingly pessimistic about the chances for such a
deal. “You have an investment community that’s sitting on a hair trigger, and on
the surface these headlines are disturbing, said Jack Ablin, chief investment
officer at Harris Private Bank in Chicago.
“Any reticence on the part of Germany is going to be viewed as a
Stocks on Wall Street opened lower on worries ahead of the EU
summit , snapping two straight days of gains.
The Dow Jones industrial average was down 65.85 points, or 0.54
percent, at 12,084.28. The Standard & Poor’s 500 Index was down 9.14 points,
or 0.73 percent, at 1,249.33. The Nasdaq Composite Index was down 23.48 points,
or 0.89 percent, at 2,626.08.
“We’ll probably keep seeing volatility until we see the plan, and
if it disappoints we could drop 2 or 3 percent,” said James Dailey, portfolio
manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.
Since reaching a closing low on Nov. 25, the S&P 500 had risen
almost 9 percent through Tuesday on hopes for a credible outcome to the summit.
Equities on global and European markets were also in negative
territory, after giving back early gains.
The MSCI world stocks index was down 0.3 percent after rising 0.4
Europe’s FTSEurofirst 300 fell 0.7 percent, giving up an earlier
rise of around 0.6 percent.
The benchmark 10-year U.S. Treasury note was up 9/32 in price, and
its yield was at 2.0523 percent.