Markets Are Coming Back In Green Zone

NY Times Reports:

In Europe, the central bank lowered its key rate by half a percentage point, to 2 percent, as recent economic data showed that inflation was easing but the recession was deepening. Major markets in Europe were all down in afternoon trading.

In the United States, the producer price index fell 1.9 percent, its fifth consecutive monthly decline, as energy costs continue to drop. The core rate, which excludes volatile food and energy costs, rose 0.2 percent last month.

In addition, new jobless claims rose more than expected last week to 524,000 from 470,000 a week earlier. Analysts were expecting 500,000 new claims.

Shares on Wall Street, which spent much of the day sharply lower, rebounded in mid-afternoon trading. The Dow Jones industrial average down, which had been down almost 200 points, was about 50 points higher shortly after 2:30 p.m. The broader Standard & Poor’s 500-stock index was up 0.7 percent.

Marketwatch reports.

U.S. stocks bounced off their session lows Thursday afternoon as traders viewed a plunge in the Dow Jones Industrial Average to below 8000 as a late-day buy signal.

Weighed down by fears the banking system may need yet another government rescue, the broad spectrum of stocks spent much of the morning selling off. Notably, the Dow Jones Industrial Average hit its low point in the early afternoon around 7995, with the move marking its first intraday trek below 8000 since Nov. 21.

But stocks bounced off those morning levels, with the Dow recently up more than 30 points, or 0.4%, at 8229, while the S&P 500 rose 3, or 0.3%, to 845.52. Technicians noted the morning sell-off the S&P 500 tested an important interim support level of 816 on the S&P 500, which marked two December low points.

"With five waves down on the hourly chart, I believe that near-term shorts should now cover anything sold upon the 850 break, especially if the S&P cash can sustain back above 820," wrote Michael Krauss of JPMorgan.