Stock market sputters despite assurances

 @ibtimes
on March 08 2010 12:31 PM

The stock market is struggling on Monday despite reassuring news from China, Europe, and AIG. 

The S&P 500 Index is down 0.14 points, or 0.01 percent, to trade at 1,138.55 at 12:18 PM EST.  The Dow Jones Industrial Average is down 8.09 points, or 0.08 percent, at 10,558.11.  The Nasdaq Composite is up 0.19 percent as tech stocks, led by Cisco (NASDAQ:CSCO) and Research in Motion (NASDAQ:RIMM), fared well. 

AIG

Shares of American International Group (NYSE:AIG) continue to rise as the firm sheds units and raises cash with plans to reduce its debt to the U.S. government.

AIG announced that it will sell its American Life Insurance Company, or Alico, to MetLife (NYSE:MET) for $15.5 billion.  Last week, it reached an agreement to sell its Asian life insurance unit to a U.K. firm for $35.5 billion.

According to AIG Chairman Harvey Golub, the two deals will generate $31.5 billion in cash and $19.2 billion in securities.  The firm plans to use the funds to pay back the U.S. government.

Shares of AIG rose 3.74 percent and shares of MetLife rose 3.97 percent.                    

China

Fears of rapid liquidity withdrawal from China also eased on comments made by Chinese Commerce Minister Chen Deming.  Chen said that exiting from the stimulus does not mean all these measures will disappear. They will still be there, but there will be some fine-tuning. 

Of the Chinese Yuan, he said that its eventual appreciation will be gradual and controlled. 

Greece

Greek Prime Minister George Papandreou met with French President Nicholas Sarkozy on Sunday.  In a joint press conference after the meeting, Sarkozy said that France is by the side of Greece in the most resolute fashion. 

Christine Lagarde, working in tandem with her colleagues in the Eurozone and in Europe, is working on a number of precise measures if Greece needs them, Sarkozy added.

Although European leaders still did not unveil details of specific plans to aid Greece, Sarkozy's pledge of support was still welcome as Greek bonds rose and the euro gained.

Papandreou is scheduled to meet with U.S. President Obama on Tuesday.  

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