Wall Street stabilizes with two-day winning streak

Despite slight upturn, Wall Street remains on track for its worst 3-week decline since March of 2009; Obama meets with top CEOs on economy.

August 12, 2011 22:16
1 minute read.
Wall Street

Wall Street_311. (photo credit: Thinkstock/Imagebank)


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NEW YORK - Wall Street strung together a two-day winning streak on Friday for the first time since mid-July, while European stock markets rallied as a ban on short-selling financial shares threw the battered sector a lifeline.

Investors also took comfort from US retail sales that rose in July for the biggest gain since March. That was tempered somewhat by a separate report that showed consumer sentiment in early August fell to the lowest since May 1980.

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Consumer spending accounts for two-thirds of US economic activity, and the retail sales data indicated the third quarter was off to a promising start.

Analysts said the sentiment report was disappointing, but the drop was not too shocking, given recent political wrangling over the US deficit and declines in the stock market.

Equities markets were relatively calm at the end of a whipsaw week sparked by Standard & Poor's downgrading the US credit rating. Wall Street remains on track for its worst three-week decline since March of 2009 when stocks hit 12-year lows.

US stocks were up about 1 percent, while European shares closed up 3.6 percent. Bank shares, which have fallen sharply in recent days, led the move higher in Europe after the ban on short selling imposed by France, Italy, Spain and Belgium.

"Markets have stabilized a little bit after the short-selling ban," said Colin McLean, managing director at SVM Asset Management in Edinburgh. "But banks have fallen pretty far and most are oversold and are just bouncing off low levels."

Meanwhile, US President Barack Obama met Friday with chief executives from Johnson & Johnson, Wells Fargo & Co, US Bank, Xerox Corp, BlackRock Inc, according to a source familiar with the plans.

He also met with the CEO of Silver Lake Partners.

Obama talked about global financial turmoil, the state of the US economy, and job growth with the executives.

White House spokesman Josh Earnest said on Friday that Obama was constantly "on the hunt" for new job creation ideas.

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