CLOSING BELL: August 16th: DJIA: 13,250.11 | UP 85.33 | +0.65%
OIL: $95.60, UP 1.27, +1.35%
GOLD: $1,619.20, UP 12.60, +0.78%
GASOLINE (US Avg): $3.710, UP .001
Richard Leong, Reuters – World shares rose to near 3-1/2-month highs on Thursday after supportive comments from Germany on the European Central Bank’s efforts to contain the region’s debt crisis, while disappointing U.S. data weakened the dollar.
Investors were heartened by comments from German Chancellor Angela Merkel, who said ECB President Mario Draghi’s declarations last month to do whatever was necessary to save the euro were “completely in line” with the approach taken by European leaders. Draghi was criticized within Germany in the wake of those comments.
Merkel’s remarks raised the prospect the European Central Bank might soon buy the sovereign debt of Spain, Italy and other debt-laden euro zone members whose high borrowing costs could become crippling. Her comments sent 10-year Spanish bond yields to a one-month low of 6.55 percent.
“Anything from the German quarter that expresses some support is very positive for stocks, peripheral debt and other risky assets. That means the ECB would not be thwarted with its efforts,” said Robert Tipp, chief investment strategist at Prudential Fixed Income in Newark, New Jersey.
On the economic front, a small, unexpected rise in U.S. jobless claims and a surprise drop in housing starts renewed expectations the Federal Reserve would engage in a third round of large-scale bond purchases, dubbed QE3, to help the sluggish economy. That initially spurred investor appetite for safe-haven U.S. and German government bonds.
Read the rest of this article at Reuters here.
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