Wednesday, November 2, 2011

Markets Rebound as Fed Stands Pat; Greece in a Bind over Bailout

Dow 11,836.04, +178.08 (1.53%)
NASDAQ 2,639.98, +33.02 (1.27%)
S&P 500 1,237.90, +19.62 (1.61%)
NYSE Compos 7,461.10, +123.96 (1.69%)
NASDAQ Volume 1,942,050,875
NYSE Volume 4,062,845,250
Combined NYSE & NASDAQ Advance - Decline: 4528-1072
Combined NYSE & NASDAQ New highs - New lows: 47-45
WTI crude oil: 92.51, +0.32
Gold: 1,729.60, +17.80
Silver: 33.94, +1.21

Recapping the days events in no-frills fashion:

German Chancellor Angela Merkel and French President Nicolas Sarkozy met with the IMF and Greece's Prime Minister George Papandreou to discuss the Greek leader's abrupt call for a national referendum on whether or not to accept the Euro bailout and associated austerity measures. According to early, unconfirmed reports, Papandreou would not budge on a plebesite early next year, pushing the EU leaders to issue a freeze on Greece's $8 billion in bailout funds, a move which could send the whole European debt crisis into a new, more dangerous phase as the Greek government will surely run out of cash prior to the proposed referendum.

The Federal Reserve chose to take no policy action on the federal funds rate, keeping the effective rate between 0.25% and zero. The Fed added some language to its statement, highlighting more positive tones as the US economy gathered steam in the 3rd quarter.

The ADP private payroll survey estimated that US employers added 110,000 private sector jobs in the month of October, after a revised 116,000 job gains in September.

Stocks ended a two-day losing streak, though the Fed's announcement and subsequent news conference didn't move markets much in either direction.

Volatility remains quite high, with the S&P Volatility Index (^VIX) ending the day at 32.74.

All interest will turn to employment over the next two days, as unemployment claims are announced Thursday morning and the BLS' non-farm payroll data come out on Friday, both releases timed for prior to the markets' opening bell. Continuing news from Europe is also likely to be at the top of investor interest.

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