The likelihood of further aid for Greece and a determined effort by Eurozone officials to keep Athens from defaulting has meant that spread betting markets have shrugged off yet another round of poor US economic news.
A sharp drop in confidence among US consumers and a fall in the ISM's Chicago index might have led to a nasty sell-off this afternoon, but relief about a new rescue plan for Greece has buoyed risky assets.
Whether this is sustainable in a world where US data continues to point to a slowing economy remains the key question. Ultimately, anaemic growth in the world's largest economy is immeasurably more important than the financial rescue of an impoverished Mediterranean nation, and this key dynamic will probably assert itself in the coming week.
More bad news from the US
Disappointing US economic data is becoming something of a recurring theme, and today's news has added to that view.
Consumer confidence unexpectedly dropped to its lowest level in six months, as both business conditions and the labour market turned poorer. The index maintained by the Conference Board hit 60.8, from a revised April reading of 66, having been forecast to edge up to 66.6.
Higher food and fuel prices are making Americans more pessimistic about the prospects for growth in the medium term.
In fact, the hard-pressed US consumer encountered further difficulties with news that house prices declined 5.1% in the first quarter when compared to the same period in 2010.
In the various measures that make up the confidence index, the gauge of present conditions fell to 39.3 from 40.2, while the expectations gauge fell from 83.2 to 75.2. The proportion of consumers expecting their incomes to rise over the next six months fell to 14.8% from 17%, while the share of those who said jobs are hard to get increased to 43.9% from 42.4%.
Adding to the less-than-optimistic picture, the Institute of Supply Management's index, known as the Chicago index, fell to 56.6 in April from 67.6, the lowest since November 2009, although at least expansion is still continuing.
Ultimately however, the world economy stands or falls by the efforts of the US consumer, and there appears to be little hope that he is ready to lead everyone forward into the 'broad sunlit uplands of recovery' just yet.
Nokia takes a beating
US-listed shares in Nokia have fallen 15% following news that it had cut forecasts for the second quarter due to lower prices and competition from firms such as Apple and Google.
The original projection of $8.8 billion in sales will not be met, the firm said, while margins will also fall short of expectations. The shares are now at $7, a level not seen since April 1998.
By 3.30pm (London time), the Dow Jones was up 0.59% to 12,514.69 on the indices spread betting markets, with the S&P 500 rising 0.47% to 1337.39. In London, the FTSE 100 pared some of its morning gains, and was up 0.64% at 5977.03, proving once again that although it can reach 6000, staying there is a different matter entirely.
UK equities - Experian, Desire Petroleum
Leading the UK market higher throughout the day was credit firm Experian, which rose 3% to 799p following an upgrade from Credit Suisse. The bank raised its rating from 'neutral' to 'outperform', saying that the company would begin to make acquisitions and also return capital to investors.
In the small cap arena, Desire Petroleum is up 10% at 13p, as long-suffering investors in the company were cheered by news that seismic tests had indicated two new leads that may result in discoveries of oil in the North Falkland basin.
However, the company will need fresh funds to pursue work on these discoveries, and this may prove difficult to find given Desire's long record of disappointments.
Remember that financial spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.
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'Spread Betting News 31 May 2011', Article by IG Index, last update: 31-May-11
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