Stocks mixed ahead of Yellen comments; Greek shares jump
FRANKFURT, Germany (AP) — European stocks drifted sideways as investors awaited remarks from U.S. Federal Reserve Chair Janet Yellen to glean any hints on when interest rates might go up.
Greek stocks were the exception, trading sharply higher after the government submitted a list of reforms aimed at winning final approval for extended rescue loans from the country’s creditors.
European officials said the list could serve as a basis for discussion about more credit for the struggling country.
KEEPING SCORE: European markets were steady with France’s CAC-40 more or less unchanged at 4,861 and Germany’s DAX barely up at 11,135. Britain’s FTSE 100 rose 0.2 percent to 6,927. U.S. stocks were poised for a similarly flat performance with Dow futures up 0.1 percent to 18,096.00 and the broader S&P 500 futures little changed at 2,106.
The standout performer Tuesday was the Athens Stock Exchange General Index, which traded 7.5 percent higher, led by bank stocks. National Bank of Greece rose 14.6 percent, Alpha Bank 13.0 percent, Piraeus Bank 11.5 percent and Eurobank Ergasias 11.3 percent.
FED FOCUS: Investors will be listening for any hints from Yellen on the timing of interest rate hikes from the Fed when she delivers her semiannual report to the U.S. Congress. Many economists have predicted the central bank will raise interest rates in June; others think the bank may delay increases to make sure the U.S. recovery is on solid ground.
THE QUOTE: “Effectively the Fed is moving closer and closer toward the point where they have to either do something or send a signal that their previous optimism no longer holds water and they’re not going to do anything,” said Michael Every, Rabobank’s head of Asia-Pacific financial market research. Investors will be closely examining the remarks by Yellen, who has a blunter speaking style than predecessors Alan Greenspan and Ben Bernanke. “Today will be another test where we get to see just how plainspoken she can be when the markets are anxiously looking at, ‘Will they or won’t they raise rates within a few months?’”
GREECE: In addition, investors will continue to monitor developments surrounding Greece. The country’s left-wing government has delivered a list of reforms in a bid for extension of the country’s rescue loans. Greece and its bailout creditors reached a tentative agreement last week to continue a rescue loan program by four months to avoid the risk of a Greek default and exit from the euro currency. The list stresses efforts to improve government finances by fighting tax evasion, corruption and excessive bureaucracy while relieving poverty caused by a six-year recession. Finance ministers from the 19-country eurozone are due to assess the list later Tuesday via teleconference.
ASIA’S DAY: The Nikkei 225 index in Japan advanced 0.7 percent to close at 18,603.48 and South Korea’s Kospi gained 0.4 percent to 1,976.12. Hong Kong’s Hang Seng slipped 0.4 percent to 24,750.07. Australia’s S&P/ASX 200 added 0.3 percent to 5,927.00. Markets in mainland China remained closed for the Lunar New Year holiday.
ENERGY: Benchmark U.S. crude rose 27 cents a barrel to $49.72 in electronic trading on the New York Mercantile Exchange. Brent crude, used to price oil sold on international markets, added 57 cents to $59.47 a barrel in London.
CURRENCIES: The dollar strengthened 0.6 percent to 119.48 yen. The euro traded flat against the dollar at $1.1328.
Chan contributed from Hong Kong