Tuesday’s Mid-Day Movers: 3 Stories Driving Markets
The U.S. equity markets advanced on Tuesday afternoon after suffering the largest losses this year to date on Monday. Gains were partially fueled by strong earnings as all 10 groups in the S&P 500 rose.
At 12:25: p.m.: DJIA: +0.80%, S&P 500: +0.88%, NASDAQ: +1.05%.
1) Five years after the financial crisis started to pick up steam, U.S. officials are finally bringing legal action against one of the three major credit rating firms. However, the motivation for the lawsuit is questionable, to say the least.
The U.S. Department of Justice filed a civil lawsuit against Standard & Poor’s, alleging the McGraw-Hill (NYSE:MHP) unit improperly used its rating system to assign grades to mortgage bonds that did not predict the full magnitude of the housing downturn and nearly caused a meltdown of the global financial system. It would be the first federal enforcement action against a credit rating firm over the crisis and several states are likely to join the lawsuit… (Read more.)
2) The 10-second takeaway from the January 2013 Non-Manufacturing ISM Report on Business is captured in a comment from Anthony Nieves, who chairs the Institute for Supply Management. Nieves said: “Respondents’ comments are mixed about the economy and business conditions; however, the majority of respondents are optimistic about the overall direction.”
January’s NMI came in at 55.2 percent, 0.5 points lower than December’s reading, but a fraction higher than estimates. This reading suggests that overall non-manufacturing business activity is growing, but the rate of growth has slowed down slightly. The 12-month average growth rate for the NMI is 54.5… (Read more.)
3) While there are now a number of strong indicators that the euro zone is almost recovering from recession, there are still some shaky points and uncertainties for individual nations.
One of the most significant measures of economic growth or decline in the euro zone is Markit’s Eurozone Composite PMI, which measures activity across thousands of companies throughout the region. The PMI result for January reached a 10-month high of 48.6, which still indicates economic contraction but is a move in the right direction from December’s reading of 47.2. If the PMI increases to more than 50, it would indicate economic growth… (Read more.)
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