Reuters: Most Read Articles: Euro slips, sentiment sours after Greek vote

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Euro slips, sentiment sours after Greek vote Jun 18th 2012, 15:38 Traders talk in front of computer boards at the stock exchange in Madrid June 15, 2012. Credit: Reuters/Andrea Comas By Herbert Lash NEW YORK | Mon Jun 18, 2012 11:38am EDT NEW YORK (Reuters) - The euro fell and long-dated government debt prices rose on Monday as initial enthusiasm over a weekend victory for pro-bailout parties in Greek elections soon gave way to pessimism about the nagging debt crisis still facing the euro zone. Voters gave a majority to parties supporting Greece's economic bail-out on Sunday, easing worries about a break-up in the euro zone and boosting risk assets initially. But a relief rally among risk assets fizzled and prices of safe-havens such as bonds rose. Yields on Spanish and Italian bonds also climbed in a clear sign that the Greek election did not remove investor concerns about the region's debt crisis. "The win in Greece does not really resolve anything. It's still going to be tough for Greece," said Boris Schlossberg, managing director at investment advisory firm BK Asset Management in New York. "And with Spanish and Italian yields at high levels, the credit market remained skeptical that Europe is going to get out of the debt crisis." Stocks on Wall Street mostly fell, pulled down by European concerns and recent data showing a weakening U.S. economy. Tech stocks rose, led by Apple (AAPL.O), Ebay (EBAY.O) and Amazon.com (AMZN.O). European equity markets reversed early gains, pulled down by declines of 2.9 percent and 2.8 percent, respectively, for Spain's IBEX .IBEX and Italy's FTSE MIB .FTMIB indexes. Spanish bond yields hit a new euro-era high above 7.0 percent, a level considered unsustainable, on worries that Spain may need more funds than previously expected to bail out its struggling bank sector. The Dow Jones industrial average .DJI was down 20.77 points, or 0.16 percent, at 12,746.40. The Standard & Poor's 500 Index .SPX was down 0.34 points, or 0.03 percent, at 1,342.50. The Nasdaq Composite Index .IXIC was up 4.62 points, or 0.16 percent, at 2,877.42. The FTSEurofirst 300 .FTEU3 index of top European shares fell 0.2 percent to 991.48 points. The price of benchmark U.S. 10-year notes rose 1/32 to yield 1.59 percent. Prices on German 10-year bonds also rose, yielding 1.41 percent. Bids on Spain's key 10-year government bonds sent yields up as high as 7.3 percent, the highest level in the euro era and above the rate at which Greece, Ireland and Portugal were forced to seek international bail-outs. The euro fell about 1.0 percent to $1.2597, off a one-month high reached during Asian trading in reaction to the Greek vote. The U.S. dollar index .DXY rose 0.3 percent to 81.864. In commodity markets, the concerns over the euro zone erased initial gains in reaction to the Greek vote and gave gold a boost as its safe-haven status returned to the fore. Spot gold was down $3.17 to $1,623.00 an ounce. Brent crude was down 1.74 cents at $95.87 a barrel, sliding from a one-week high of $99.50 a barrel hit early in the session. U.S. oil futures fell $1.30 at $82.73 a barrel. Link this Share this Digg this Email Reprints

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