Monday, August 8, 2011

Wall Street

The following were the top stories in The Wall Street Journal on Monday. Reuters has not verified these stories and does not vouch for their accuracy.

* The European Central Bank signaled it would purchase government bonds of Italy and Spain on a large scale, in the most dramatic and controversial escalation of its nearly two-year effort to stem Europe's unfolding debt crisis.
* The first-ever credit downgrade of the U.S. left Wall Street and Washington struggling to come to grips with a new world order.
With the U.S. stripped by Standard & Poor's of its triple-A credit rating, big banks brought in people to staff trading desks over the weekend, and Obama administration officials put a full-court press on skittish investors.
* U.S. Treasury Secretary Timothy Geithner said Europe needs to boost the size of its emergency bailout facility to stem a sovereign-debt crisis threatening to engulf two of its largest economies and push the global economy back into a recession.
* Asian markets saw their initial losses deepen in midday trading Monday as investors grew skeptical following the historic downgrade of U.S. debt and moves to shore up European debt over the weekend. Gold also rose to a new nominal record near $1,700 an ounce.
* U.S. regulators, intensifying their probe of last year's "flash crash" and other market swings, have sent subpoenas to firms that do high-frequency trading, according to people familiar with the matter.
* The Group of Seven industrial nations pledged a coordinated effort to ensure financial markets have enough liquidity and can operate properly despite the euro-zone's spreading debt crisis and the loss of the U.S. triple-A credit rating.
* For Wall Street, Standard & Poor's downgrade of the U.S. is one more sign that dysfunctional government is contributing to the market's decline.
After the 2010 election, many on Wall Street welcomed divided government, on the theory that the less Washington does, the better markets do. Now, investors have changed their tune and once again are calling on Washington to fix things.