Greece to Push U.S. Stocks

U.S. stocks rebounded sharply turned up or on Monday (05/10/2010) local time with the blue chip Dow index closed up nearly 4 percent after a massive rescue package for the euro zone reduce investor fears of debt crisis.

Dow Jones Industrial Average jumped 404.71 points (3.90 percent) to 10785.14 after turbulent week for Wall Street which saw the index had dropped nearly 1,000 points on Thursday.

Following a strong rise by the Asian and European stocks, the Dow recorded their greatest increase in a single session since March 2009.

The NASDAQ composite index rose 109.03 points (4.81 percent) to 2374.67, the first triple-digit daily increase since October 2008, while the index of the Standard & Poor's 500 rose 48.85 points (4.40 percent) to 1159.73 .

Investors reacted positively to the joint adoption by the European Union and the International Monetary Fund, Monday, the beginning of the aid package 750 billion euros (about one trillion U.S. dollars) to neighboring Greece and the euro zone to ease a crisis that threatens the global economic recovery.

After the announcement, the U.S. Federal Reserve, European Central Bank, and central banks in Japan, UK, Canada, and Switzerland said they would intervene to ensure that the dollar shortage is not happening in the European market.

Some experts wondered whether the massive stock gains on Monday is the beginning of the rebound to the highest in 2010-which occurred just a few weeks ago, or just a short term rally from last week's slump, which is the culmination of the worst weekly loss in one year, said analysts at Briefing.com.

"Time will know whether the coordinated action was successful. For today is spurred massive trade assistance based on the idea that it's only possible answer," said Patrick O'Hare, an analyst at Briefing.com market top.

"Anyway, while there is a sense of relief in the market today about monetary power is applied, there will be a price to pay for the bailout of fiscal (bailout) for those who need it," he warned.

Rescue agreements consist of 440 billion euros from euro zone countries, and 60-billion-euro loan from the European Commission. Spanish Finance Minister Elena Salgado said the IMF will offer 250 billion euro facility.

Analysts at Charles Schwab & Co., said the financial rescue package from IMF-EU 110 billion euros to Greece has cooled spread the fear of debt and preserve the prospect of the euro zone continued global recovery. "Our opinion is that the risk reward ratio has become positive again," said Wells Fargo chief market strategist Al Goldman.

Australian Stocks Fall 2.02 Percent

In trading on Friday (07/05/2010), the Australian Stock Exchange index fell 2.02 percent, amid fears the crisis will spread to parts of the Greek world. The panic in American stock exchanges, with the Dow Jones index plummeted 9 per cent had even recovered, also affect investor decisions in Australia.
Conditions in Europe, has affected the markets then even worse, said Ben Potter, analyst at IG Markets, Friday. Ultimately, we will speak of the deteriorating condition of the country, not just the company, complained adventures.
Australian investors are also affected by the statement of Prime Minister Kevin Rudd. I do not intend to give warning of this condition (market decline). But, we are following the developments closely, he said. The Australian market has fallen 6.8 percent, in the past week.
Apart from the influence of Greece, the Australia stock market especially mining stocks hit by commodity price declines, and the Australian government plans to implement 40 percent tax to mining companies who reap super profits.