US stock market up slightly: Bank of America performs well
US stock market went up slightly. But there was no enthusiasm as international sentiments seem to be playing on the minds of investors in the US and beyond. Greece Bailout remains an issue that must be addressed and resolved before outlook improves and the stock market really benefits from the rosy outlook of the US economy.
There were real fears of Greece on defaulting on its huge debt. Its economy is in shambles and things don’t seem to be improving even slightly. A report in Bloomberg sometimes ago had suggested that the embattled European nation has a 98 percent chance of defaulting on its debt in the next five years. It costs a record $5.8 million upfront and $100,000 annually to insure $10 million of Greece’s debt for five years using credit-default swaps, up from $5.5 million in advance on Sept. 9, according to CMA.
The report while talking in detail about the reasons Greece may default on its mounting debt said, “The default probability for Greece is based on a standard pricing model that assumes investors would recover 40 percent of the bonds’ face value if the nation fails to meet its obligations. CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated credit- swaps market, lowered its recovery assumption to 38 percent late yesterday, which would give Greece a 95 percent chance of default”.
Meanwhile the stock market went up slightly. Bank of America Corp. was among the best performing companies. Its shares went up by as much as 3.6 percent reaching its highest level in more than six months. Another great performer was Hartford Financial Services Group Inc that went up by as much as 7.6 percent.
Dow Jones Industrial Average closed at 12,884 up marginally by 5.75 points. S&P 500 Index closed at 1,349.96 up slightly by 2.91 points while Nasdaq closed at 2,915.86 adding 11.78 points or 0.41 percent.
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