Moody downgrades Greece governments rating to Junk category, market not much affected
Moody downgraded the rating by four notch to Ba1, placing it one notch into junk status. The agency also downgraded Greece's short-term issuer rating to not-prime category from Prime 1.
ANOTHER GLOOMY picture of European debt crisis, Moody’s Investor service downgraded Greece government bond rating to junk category. Moody downgraded the rating by four notch to Ba1, placing it one notch into junk status. Sarah Carlson Moody’s senior analyst said, “The rescue package effectively eliminates any near-term risk of a liquidity-driven default and encourages the implementation of a credible, feasible, and incentive-compatible set of structural reforms, which have a high likelihood of stabilizing debt service requirements at manageable levels.”
"Nevertheless, the macroeconomic and implementation risks associated with the program are substantial and more consistent with a Ba1 rating,” Carlson added.
Meanwhile, the US market seems to be unaffected by the Moody’s rating and the Dow Jones industrial average rose about 60 points in the afternoon trading after hitting as high as 118 points. In past two days Dow has gained 312 points.
In midafternoon trading, the Dow rose 59.10, to 10,270.40. The Standard & Poor's 500 index rose 6.93, to 1,098.53, while the Nasdaq composite index rose 21.31, to 2,264.91.
Traders this week will get reports on inflation and manufacturing as well as numbers on housing starts, weekly jobless claims and import prices. Weekly report on jobless claims is expected to show another modest dip. Claims are still above the level that would indicate private employers are consistently hiring new workers.
Meanwhile, the US market seems to be unaffected by the Moody’s rating and the Dow Jones industrial average rose about 60 points in the afternoon trading after hitting as high as 118 points. In past two days Dow has gained 312 points.
The fear of government spending cut aimed at slashing debt sidelined by the production reports and encouraged market to move ahead. The pace of recovery from recessionary impact is major concern amidst the euro surprise.
Most stocks rose but shares of BP PLC fell 8.8 percent because on concerns that the company will suspend its dividend to ease political pressure it is facing in the U.S. The board is weighing whether to stop the $2.63 billion payout scheduled for June 21.In midafternoon trading, the Dow rose 59.10, to 10,270.40. The Standard & Poor's 500 index rose 6.93, to 1,098.53, while the Nasdaq composite index rose 21.31, to 2,264.91.
Traders this week will get reports on inflation and manufacturing as well as numbers on housing starts, weekly jobless claims and import prices. Weekly report on jobless claims is expected to show another modest dip. Claims are still above the level that would indicate private employers are consistently hiring new workers.
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