Wednesday, 22 June 2011

Greek government wins confidence vote

Bloomberg reports the latest news from Greece:

Greek Prime Minister George Papandreou won a vote of confidence, bolstering his new government’s chances of pushing through austerity measures to secure further international financial aid for the country.

A total of 155 lawmakers supported the motion in the 300- seat parliament in Athens early this morning, with 143 voting against, the speaker, Filippos Petsalnikos, said in remarks carried live on state-run Vouli TV. Papandreou reshuffled his Cabinet and sought the approval of the chamber after fending off a revolt within his Pasok party last week. That came after opposition parties rejected his call for a national unity government.

Investors had apparently positioned themselves for the result earlier on Tuesday. From Bloomberg:

U.S. stocks extended their rally for a fourth day, European shares rebounded from a three-month low and the euro gained as Greece prepared for a confidence vote that may determine its financial future. Oil pared early gains and Treasuries fell, while the dollar slumped.

The Standard & Poor’s 500 Index added 1.3 percent, its biggest gain since April 20, to 1,295.52 at 4 p.m. in New York. The Stoxx Europe 600 Index climbed 1.4 percent, also its best advance since April 20. The euro strengthened 0.7 percent to $1.4403. Costs to protect European sovereign debt slid as Greek and Spanish bonds rose. Energy dragged on the S&P GSCI Index, which erased most of an early advance. Ten-year U.S. Treasury yields increased two basis points to 2.98 percent.

US stocks rose despite another poor report on the housing sector. From Bloomberg:

Sales of existing U.S. homes decreased in May to the lowest level in six months, a sign that the housing market is lagging other parts of the economy.

Purchases of existing homes fell 3.8 percent to a 4.81 million annual pace last month, in line with the 4.8 million median estimate in a Bloomberg News survey of economists, data from the National Association of Realtors showed today in Washington. Preliminary figures showing a jump in contract signings suggest May will prove to be the weakest sales month of the year, according to the group’s chief economist.

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