A rally for U.S. stock markets stalled on Monday after a German official rejected reports that the nation's lawmakers had decided to offer aid for Greece.
Spokesman Ulrich Wilhelm said reports citing legislative coalition sources were unfounded, Reuters reported. No decision has been made on the issue, he added. Lawmakers are only considering offering assistance, said legislator Michael Meister, according to Bloomberg.
U.S. stock markets pared some gains, although they are still up significantly. American Depository Receipts of National Bank of Greece (NYSE:NBG) are trading up 24.27 percent at $4.25.
The S&P 500 index is currently trading at 1,073.65, still up 16.91 points, or 1.60 percent at 2:06 p.m., although the index traded as high as 1,078.7 around 12:20 pm. The Dow Jones Industrial Average is trading at 10,096.88, down from the morning high of 10,132. It is up 188.49 points, or 1.90 percent for the day.
The possibility of a bailout of Greece has moved U.S. stock markets today. In the morning, a rally was based on speculation that European Central Bank President Jean-Claude Trichet shortened his stay in Australia in order to attend the European Union Economic Summit on Thursday.
Later came reports that Trichet had planned to attend the summit all along and that he changed his flight for logistical reasons. Stocks then declined to erase some of their earlier gains.
Following that report, various media outlets reported that Germany is planning to offer Greece support. Reuters reported that an unidentified German government official said the decision on help for Greece has been taken in principle within the euro zone.
Moves by rating agencies also moved the market. Morgan Stanley's upgrade of Caterpillar (NYSE:CAT) sent the stock up 5.73 percent. Shares of Bank of America (NYSE:BAC) are significantly underperforming compared to other major bank shares after Standard & Poor's cut its outlook. It is virtually flat, trading up 0.07 percent.
According to Bloomberg, the stock market rally lost some steam mid day when Fitch Ratings said the U.K. needs to pledge further measures to rein in its budget deficit.
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