U.S. Stock Market go down sharply on Wednesday morning in the wake of European stocks, investors are questioning the massive refinancing operation launched by the European Central Bank (ECB) earlier in the day.
At the very end of the morning, the Dow Jones retreated 0.5% to 12,043.9 points, while the Nasdaq Composite falling 1.8% to 2554.9 points.
European banks were able to refinance this morning with the ECB at a fixed rate of 1% over three years for a spectacular amount of 489 billion euros.
‘People started to say, wait a minute, if the banks need much money is that they really have problems,’ says one at Capital Spreads.
The question of the use of this money is also debate, knowing of course that the ECB would be allocated to debt redemption Spanish and Italian.
‘The problem is that if this increased exposure to Italy and Spain goes wrong, the situation is much worse in a year’, says Capital Spreads. ‘This is why sellers have taken the hand. It’s a huge bet Mario Draghi has done today ‘, he adds.
In the U.S., the economic situation is much less concern.
Sales of existing homes have increased by 4% in November to reach their highest level in 10 months, according to the National Association of Realtors (NAR).
This figure confirms the gradual recovery of the real estate market.
In terms of values, Oracle picks up almost 14% after announcing lower than expected results for its second quarter, sealed by a particular customer expectations, and unveiled cautious outlook for the current quarter.
Nike escapes correction (+3.6%) after announcing better than expected results for its second quarter of 2011-12, thanks to dynamic growth in sales which offset increased production costs.
Research In Motion flew nearly 10% while the Wall Street Journal reports that Microsoft and Nokia could join forces to launch a bid for the maker of the BlackBerry.