The markets seem to be experiencing a prolonged hangover after celebrating the start of 2013 with perhaps a little too much gusto. Investors who decided to put their money back into equities after a tax deal was reached on Capitol Hill are navigating the first full week of the New Year with the markets headed to a second straight day of losses.
At 12:45 p.m.: DJIA: -0.57%, S&P 500: -0.53%, Nasdaq: -0.66%.
Here are three stories that are moving the markets on Tuesday afternoon:
1) Bank of America (NYSE:BAC) is reportedly selling the collection rights to as much as $100 billion worth of mortgages. This comes just a few days after the bank announced an interest in selling up to $300 billion in mortgage servicing rights, potentially netting the bank billions. However, shares were dropping following the market early in the afternoon, trading down about 1.2 percent.
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One source told Reuters: “There is a huge amount of servicing that is going to come off the banks. It is going to be the trade for the next three years.”
2) It’s well known by now that the federal government hit its legal borrowing limit of $16.394 trillion on December 3. Reports indicate that the emergency financing measures implemented by the U.S. Treasury Department to keep the government’s financial engine running may only provide enough fuel to get to February 15. Par for the course, policymakers are trying to use the debt ceiling as a political pawn, and the drama will unfold from here until default or, hopefully, a solution is found (at the 11th hour, no doubt).
3) The World Economic Forum’s Global Risks 2013 report found that industry experts, business leaders, and academics all agree one one thing: politicians are failing to address fundamental financial problems. Over 1,000 experts surveyed expressed pessimism about the global economic outlook for the next decade, particularly as market participants lose faith in the ability of governments to make good and timely decisions.
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