CLOSING BELL: August 24th: DJIA: 13,157.97 | UP 100.51 | +0.77%
OIL: $96.15, DOWN 0.12, -0.12%
GOLD: $1,672.90, UP 0.10, +0.01%
GASOLINE (US Avg): $3.730, UP .012
Wanfeng Zhou, Reuters – U.S. and European stocks rose and the euro bounced off lows against the dollar on Friday after sources said the European Central Bank is considering setting targets in the bond market in a bid to contain crippling borrowing costs in troubled euro zone economies.
Stocks had earlier come under pressure on worries about Greece and uncertainty over how Europe will address Spain’s debt crisis. Speculation has grown in recent weeks that the ECB will soon start buying Spanish and Italian bonds.
The ECB is considering targeting a yield band, an option gaining favor among central bankers, central bank sources told Reuters. But the decision would not be made before the ECB’s September 6 policy meeting and it wasn’t clear how wide the band would be or how the ECB would decide when to intervene in the bond markets.
“Any time we get comments out of Europe that create a perception that they are working diligently to solve the debt issue, the euro starts to rally, (the) dollar goes lower and in return, our equity markets move higher,” said Randy Frederick, managing director of active trading at Charles Schwab.
“I’m not sure if this will have lasting impact on the market.”
Further boosting investor sentiment, U.S. Federal Reserve Chairman Ben Bernanke said the Fed has room to deliver additional monetary stimulus to boost the U.S. economy. Bernanke made the comment in a letter to a congressional oversight panel.
Read the rest of this article at Reuters here.
The Common Good publishes a financial market wrap-up every weekday after markets close, available here.