Greece heads to a new election June 17, after politicians failed to put together a ruling coalition, following the May 6 election. Fears that Greece would leave the euro zone, wreaking havoc in the financial system, has been weighing on markets.
Markets were boosted Thursday after German Chancellor Angela Merkel said it would benefit the euro zone if Greece would stay a member. Several times she used the word “solidarity” in an exclusive interview with CNBC’s Silvia Wadhwa.
“I think the politicians know what they have to do and they just don’t want to do it. They have to give Greece more money if they want to keep the union alive. Put up or shut up. They literally have to renegotiate the debt terms on one hand and provide grants on the other,” said Schlossberg.
Headlines about Greek banks hit the euro and stocks in late-morning trading, as a story eventually filtered out that the Greek banks were relying on emergency lending funneled through the Bank of Greece, rather than the conventional monetary policy operations of the European Central Bank. Once the banks restructure, they can use the conventional operations.
The Dow Wednesday fell 25 to 12,606 and the S&P 500 was down 5 at 1325. The 10-year Treasury was yielding 1.765 percent, its lowest closing yield since September.
Gold continued to break down, sliding into bear market territory when it fell below $1,538.96, 20 percent below its all-time intraday high of $1,923.70 per ounce, reached in September. It finished the day at $1536.20 per ounce.
Oil ended at $92.51 per barrel, its lowest close since Nov. 2
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