Stocks slip as traders eye a sliding euro

By msnbc.com news services

Wall Street slipped Wednesday with traders focused on a sliding euro and rising Italian bond yields as market anxiety over Europe persisted.

Italy paid a euro-era record high yield of 6.47 percent to sell five-year notes in its first auction of longer-term debt since the European Union moved toward greater fiscal integration. The benchmark 10-year Italian bond yield was near 7.2 percent.

U.S. stocks have been weighed down this week in part on fears that an agreement at last week's EU summit did not go far enough to resolve the two-year-old debt crisis.

Commodity-related shares could be under pressure as copper fell for a third straight session and crude prices dropped more than 1 percent, pulled lower by a strengthening U.S. dollar. Gold fell to a two-month low and the euro dipped below what some view as a psychological barrier of $1.30.

Investors' lack of confidence is keeping them from committing to the markets, according to Oliver Pursche, president of Gary Goldberg Financial Services in Suffern, New York.

"For the past six months, every few weeks we hear 'we have an agreement' and then there's more holes in it than a sieve," he said about the recent attempt by European leaders to contain the sovereign debt crisis.

Pursche said as the year-end approaches, volume is expected to stay low and keep markets volatile.

Investors were also disappointed that the U.S. Federal Reserve gave no hints after its Tuesday meeting of new stimulus measures to offset the effects of the European crisis.

Even if a majority of economists polled by Reuters expect no further action from the Fed to boost the economy in the short term, a separate survey showed most primary dealers see the central bank enacting some type of stimulus.

The euro slid to an 11-month low against the dollar as investors speculated that more euro-zone countries' credit ratings may be downgraded in the near term, given that a quick solution to the region's debt crisis remains elusive.

Data on sales of previously owned homes from 2007 through October this year will be revised downward because of double counting, the National Association of Realtors said, indicating a much weaker housing market than previously thought.

Reuters contributed to this report.

Source: http://bottomline.msnbc.msn.com/_news/2011/12/14/9441323-wall-street-slips-as-traders-focus-on-a-sliding-euro

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