Many Asian markets were closed on Monday for the Lunar New Year. In Japan, the Nikkei closed flat at 8766, and Australia’s ASX 200 slipped .3% as miners fell.
European markets advanced on news that Greece was close to reaching a deal with debt holders. The FTSE climbed .9%, while the CAC40 and DAX gained .5%. The European banking index surged 3.9% amid rumors that France and Germany were calling for a relaxation of capital requirements.
US markets closed mixed in light trading. The Dow and Nasdaq declined .1%, while the S&P 500 edged up fractionally.
Research in Motion tumbled 8.5% after the company’s CEO resigned over the weekend.
Treasuries and Commodities
Bond prices continued to fall, dropping for a fourth straight session. 10-year notes slipped 11/32 to yield 2.07%, and 30-year notes fell 28/32 to yield 3.14%.
Currencies
The Euro crossed back above 1.30 to 1.3031, up .7% amid hopes for a Greece debt deal. Similarly, the Swiss Franc gained .8% to 1.0792. Both the Australian and Canadian Dollar rose .5%, while the Yen and Pound settle little changed.
Economic Outlook
Tuesday’s lone report is the Richmond manufacturing index, which is expected to rise from 3 to 6. The Fed will begin their 2-day meeting on Tuesday.
European Officials Reject Greek Debt Deal
Equities
In Asia, markets in Korea, China, and Hong Kong remained closed for the Lunar New Year. The Nikkei rose .3% to 8985, as Elpida Memory soared 4% on hopes for a successful merger with Micron Technology. The ASX 200 closed flat, surrendering earlier gains.
European shares declined as hopes for a Greek debt deal began to fade, after finance ministers rejected an offer from private debt holders. The FTSE and CAC40 fell .5%, and the DAX eased .3%, despite an upbeat PMI report which rose to its highest level in 4 months.
In the US, the major indexes closed mixed. The S&P 500 snapped its 5-day winning streak, slipping .1%, while the Dow ticked down 33 points to 12676. The Nasdaq posted a modest .1% rise.
Currencies
The Dollar traded mixed against world currencies, as traders paid little mind to the disappointing news from Greece. The Yen slumped 1% to 77.72 against the dollar, and the Australian dollar declined d.5% to 1.0477, while the Pound rose .3% to 1.5616. The Euro inched up 7 pips to 1.3026, and the Canadian Dollar edged up .1% to 1.0100.
Economic Outlook
The Richmond manufacturing index blew past forecasts, surging to 12 from last month’s reading of 3. Analysts had expected the index to rise to 6.
Fed Pledges to Keep Rates Steady Until 2014
Equities
Outstanding earnings from Apple on Tuesday evening helped propel Asian markets higher on Wednesday. The Nikkei rallied 1.1% to 8840, as a drop in the Yen boosted exporters such as Sony, which surged 4.8%. The ASX 200 climbed 1.1%, and the Kospi inched up .1%. Markets in China and Hong Kong remained closed for the Lunar New Year.
Concerns over Greek’s debt situation pressured European banks, sending the FTSE down .5% and the CAC40 down .3%. Nonetheless the DAX managed a slight gain. The European mobile sector fell after Ericsson missed profit forecasts.
US stocks advanced in the afternoon, thanks to a commitment from the Fed not to raise interest rates for at least 2 years. Tech shares led the advance, as the Nasdaq gained 1.1% to 2818. The Dow rose 83 points to 12759, and the S&P 500 closed up .9%.
Apple shares surged 6.2% to 446.66 after reporting earnings which exceeded analyst forecasts. 15 brokerage firms raised their targets on the stock, which settled at an all time closing high.
