Plans to tackle the euro zone debt crisis have stalled with Paris and Berlin at odds over how to increase the firepower of the region’s bailout fund, French President Nicolas Sarkozy said on Wednesday.
Sarkozy told French lawmakers the dispute was holding up negotiations and flew to Frankfurt to talk with German Chancellor Angela Merkel in an attempt to break the deadlock ahead of a make-or-break European leaders’ summit on Sunday.
The two leaders left that meeting without speaking to waiting reporters.
Asked if a deal had been reached, Jean-Claude Juncker, chairman of the Eurogroup of euro zone finance ministers who attended the evening meeting, replied: “We’re still in meetings Saturday, Sunday.”
As other major economies tried to pressure European leaders to get a deal done, Canada’s Finance Minister Jim Flaherty called the slow progress “disconcerting” and the head of the World Bank urged policymakers to take “definite steps.”
A French-German split over Europe’s rescue strategy emerged as finance ministers prepare to meet in Brussels tomorrow under pressure to craft a solution to the region’s debt crisis.
With a summit scheduled two days later, a disagreement over the European Central Bank’s role threatens to stymie progress on the banking and economic questions needed to deliver the comprehensive strategy demanded by global policy makers. Luxembourg Prime Minister Jean-Claude Juncker, who chairs the group of euro-area finance ministers, indicated an impromptu meeting of European leaders in Frankfurt last night failed to resolve differences. “We are still meeting,” he said as he departed.
The S&P 500 opened fractionally in the red but bounced around the break-even level through the noon hour. But shortly after 1 PM, the mood turned. And the release of the Fed’s Beige Book at 2 PM apparently struck the market as more gray than beige. The index fell the next hour and then stabilized during the final hour to close with a loss of 1.26%.
Year-to-date the index is in the red at -3.80% and 11.27% below the interim high of April 29.
From an intermediate perspective, the index is 78.8% above the March 2009 closing low and 22.7% below the nominal all-time high of October 2007.
Economics:
- At 8:30 a.m. ET, we get weekly jobless claims. Economists think they came in at 400,000, down a bit from 404,000 last week. Feels like they have been forecasting 400,000 claims every week since the first Bush administration.
- At 10:00 a.m. the National Association of Realtors unveils home resales (also called existing home sales) for September. Economists think sales slowed to a 4.9-million-unit pace from 5.03 million in August.
- Also at 10:00 a.m., the Conference Board releases its leading indicators for September. They were up 0.2%, economists think, after rising 0.3% in August.
- And at 10:00 a.m., we also get the Philadelphia Fed index for October. Economists think this came in at -9, a little improvement over -17.5 in September. This index has been pretty awful for a while, but has come to seem detached from the national ISM number.
FedSpeak:
- At 9:00 a.m., Atlanta Fed President Dennis Lockhart speaks.
- At 9:15 a.m., St. Louis Fed President James Bullard talks.
- At 12:15 p.m., Cleveland Fed President Sandra Pianalto speaks.
- At 4:00 p.m., Minneapolis Fed President Narayana Kocherlakota talks, too.
- Some time tomorrow we also hear from Fed Governor Daniel Tarullo.
Earnings:
Before the opening bell, we get results from:
- Union Pacific
- Snap-On
- PPG Industries
- McGraw-Hill
- Laboratory Corp of America
- Janus Capital
- Huntington Bancshares
- Boston Scientific
- BB&T
- Danaher
- Fifth Third
- Philip Morris
- FLIR Systems
- AT&T
- Baxter International
- Newfield Exploration
- Eli Lilly
- KeyCorp
Later we hear from:
- Noble Energy
- Diamond Offshore Drilling
- AutoNation
- Southwest Airlines
- Nucor
After the close we get results from:
- Chubb
- Compuware
- Microsoft
- SanDisk
- Chipotle Mexican Grill
- People’s United Financial
- Capital One
- Altera
