Bank stocks lead post-plunge bounce
Shares of Citigroup, Bank of America and Morgan Stanley climb despite Moody's credit downgrades. Eurozone leaders meet in Rome to address the debt crisis.
By Andrea Tse
Stocks were rising Friday after the previous session's deep sell-off as investors shrugged off Moody's downgrade of 15 major banks late Thursday.
Stocks suffered their worst single-day drop in three weeks Thursday as investors were spooked by a batch of gloomy global economic data, a bearish trading call by Goldman Sachs (GS) and disappointment over the outcome of the Federal Reserve's latest policy meeting.
On Thursday evening, Moody's downgraded 15 of the world's biggest banks.
The Hong Kong Hang Seng index closed lower by 1.4%, and the Nikkei in Japan closed down 0.29%.
The FTSE in London was slipping by 0.88% and the DAX in Germany was declining by 0.98% as business confidence in the biggest eurozone economy fell to its lowest point in more than two years.
European leaders met in Rome on Friday to discuss a unanimous plan to bring relief to the eurozone debt crisis. One area of contention going into the meetings is the proposal to tax financial transactions and to have banks foot the bill for their own bailouts.
In Spain, independent audits indicate that the country's banks will, under duress, require up to 62 billion euros in financial support, below the earlier foreseen 100 billion euros in eurozone bailouts.
Friday's U.S. economic calendar is empty.
In corporate news, Monster Beverage (MNST) is being added to the S&P 500, replacing Sara Lee (SLE). Standard & Poor's expects the change to take place after the close on June 28. The change was prompted by Sara Lee's decision to spin off its international coffee and tea business to shareholders.
Shares of Darden Restaurants (DRI) fell after the company posted in-line earnings for its fiscal fourth quarter but came in slightly short on the top line.
Arch Coal (ACI) said after Thursday's close that it's laying off 750 employees, roughly 10% of its workforce. The company said it plans to reduce production at mining complexes in Appalachia because of a major downturn in demand for coal-based electricity.
Medtronic (MDT) said its board has approved a 7.2% increase in its regular quarterly cash dividend to 26 cents a share. The medical devices company said the dividend is payable on July 27 to shareholders of record on July 6.
Ryder Systems (R) lowered its fiscal-second-quarter outlook, citing weakness in its fleet management solutions business. The company now sees comparable earnings of 90 to 95 cents a share for the three months ended in June, down from a previous expectation for a profit of $1.07 to $1.12 a share.
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[BRIEFING.COM] Equities ended on their lows with the S&P 500 down 1.4%.
The S&P entered today's session with a week-to-date gain of 1.5% as investors expected reassuring words from today's Federal Open Market Committee Statement.
Stocks traded with slim losses until this afternoon's FOMC Statement and subsequent comments from Chairman Bernanke sent equities and Treasuries to their lows while also providing a significant boost to the dollar.
Today's Statement was ... More
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