The S&P 500 opened modestly higher as investors welcomed a smaller-than-expected annual decline in home prices, sending homebuilder company shares sharply higher. Equities pared early gains after a reading of consumer confidence fell to a five-month low, with officials citing a diminished labor and consumer spending outlook. Meanwhile, Congressional leaders are discussing a compromise to possibly delay the automatic spending cuts tied to the debt ceiling legislation to March 2013. Late yesterday, Moody’s downgraded the credit ratings on 28 Spanish banks, while Italy approved a plan to buy €1B worth of new Italian bank debt to boost the banks’ capital standings. Investors remain anxious over Europe’s debt crisis as failure to resolve the ongoing situation threatens to drag U.S. corporate earnings to their first decline since 2009. In the Far East, China’s leading economic indicators rose 1.1% in May, providing an indication that the nation’s slowdown may be stabilizing. Gold is down $8.21 to $1,576.27/oz., while Nymex crude oil rose $0.34 to $79.55/bbl.
Today’s Market Action
