Financial markets were lifted initially by Reuters' report that Spain would make formal request for external funding as soon as during the weekend. Yet, gains were limited after Prime Minister Mariano Rajoy denied that he would do so soon. Wall Street opened higher but then retreated later in the day. The DJIA ended the day sliding -0.24% while the S&P 500 index added +0.09%. In the commodity sector, crude oil prices dropped with the front-month WTI contract and the Brent crude contract losing -0.64% and -0.55% respectively. Gold also retreated after rising to the highest level this year. The benchmark Comex contract fell -0.43% during the day.
A Reuters report stated that an anonymous European official suggested that Spain was "ready to request a bailout as early as next weekend but that Germany had signaled it should hold off". The news sent Spanish yields lower as this changed the perception that it's Rajoy's decision for not requesting bailout imminently. The report suggested that it's Germany that had caused the delay as the country would "prefer that its parliament discusses bailout deals in Greece, Cyprus and Spain at the same time rather than one by one raises the risk that any Spanish deal would depend on negotiations in Greece". Unfortunately, the lift in sentiment was short-lived as Rajoy clarified that he has no imminent plan for requesting for financial assistance.
Meanwhile, Moody's said that it would complete a review on Spain's credit rating within this month. The agency stated that the country's investment grade rating would likely be stripped after "continuing to assess a number of factors, including Spanish banks' capital needs, the nature and size of support mechanisms, the recently released 2013 budget plan and the consequences for the euro area's crisis management framework of the further advancement of a banking union".
On US' oil inventory, the industry-sponsored API estimated that crude inventory rise +0.46 mmb in the week ended September 28. For fuel products, gasoline inventory slipped -0.06 mmb while distillate dropped -0.32 mmb. The market forecast that the DOE/EIA would report today that crude inventory gained +1.5 mmb, gasoline slipped -0.6 mmb and distillate dipped -0.4 mmb during the week.