U.S. equities have declined in early morning stock market action on Thursday, as the Dow (INDEXDJX:.DJI) is down 52 points, or 0.4 percent, to 12,366 at 11:40am Eastern Time. The NASDAQ Composite is relatively unchanged at 2,650 while the S&P 500 is off 0.2% to 1,274.
Euro Down Again
The Euro has reached a 15-month low versus the U.S. Dollar in Thursday trading, valued at $1.2795 at 11:40am Eastern Time. It appears that investors’ worries over the Eurozone’s sovereign debt crisis continue to weigh heavily on the region’s economic status. The borrowing costs for France and Hungary have increased with sovereign bond yields for those countries rising in intraday trading. Hungary’s bond auction that took place earlier today did not raise the capital hoped and many believe ratings agencies could downgrade the sovereign debt of several EU nations in coming days and weeks.
Ten-year U.S. Treasury yields are down 3 basis points to 1.96% at midday, signaling that investor sentiment remains strong for U.S. debt instruments as many decide to transfer their assets from overseas into the “safe-haven” of U.S. Treasuries.
Despite a record emergency loan authorization last month of 489 billion euros from the European Central Bank to encourage lending, many European financial institutions are still facing the need to shore up balance sheets by midyear due to their exposure to sovereign debt. The sovereign default risk of several nations throughout Europe is high according to many analysts; causing many to believe that an eventual ECB sovereign bailout loan will be the only method available to save EU countries from bankruptcy.
Dow Jones Industrials Stock Chart
At 11:40am Eastern Time, the Dow has recovered from earlier losses but remains down for the day (see chart below).
Budget wireless communications provider MetroPCS Communications Inc. (NYSE:PCS) has lost market value in early Thursday trading on disappointing 4Q subscriber numbers. Although MetroPCS added 197,000 subscribers from October through December 2011, that number missed analysts’ expectations of 200,000 to 250,000. Shares were down 9 percent to $8.00 by midday. MetroPCS reported a $0.61 Earnings Per Share in its most recent financial statement and has a Price to Earnings ratio of 13.13 with a market capitalization of $2.9 billion.
Independent oil refiner Tesoro Corporation (NYSE:TSO) has seen its shares drop 8 percent today to $22.10 by midday after it failed to meet analysts’ earnings expectations for 4Q FY2011. The company blamed fewer crude oil discounts for the disappointing numbers. Cory Garcia of Raymond James & Associates was quoted in an article by BusinessWeek.com saying, “This paints a much bleaker picture for refiners all over the country. No one thought there would be a loss.”
U.S. Presidential Politics
Following Tuesday’s close results in the Republican Iowa caucuses, Republican presidential hopefuls will head to New Hampshire for next week’s semi-closed primary before moving on to South Carolina and Florida. Mitt Romney and Rick Santorum appear to be the current front-runners among Republican voters, while Ron Paul, Newt Gingrich and Rick Perry will look to gain momentum in the weeks ahead.
In a speech earlier today, President Barack Obama stated that the nation’s Defense budget will continue to grow in upcoming years, citing the need to fulfill commitments overseas and provide security here at home. The announcement decreases the likelihood that mandatory spending cuts of $1.2 trillion scheduled to be enacted in early 2013 will actually take place. Two months ago, the Congressional Joint Select Committee on Deficit Reduction failed to agree on how to best fix the nation’s budget deficit and reduce government expenditures.
Investing in an IRA could help you save money for retirement and withdraw your earnings tax free in the form of distributions. Our most recent articles on IRA topics include IRA Contribution Limits For 2012 and Human Need EFTs For Your IRA in 2012. You can also browse through our IRA Rules and IRA Basics sections to find out more about how to Open an IRA.