Wall Street and European shares bounce back

07/09/11 16:41 CET

economy

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The world’s financial markets bounced back on Wednesday after three days of declines on hopes the European debt crisis might ease.

That came after Germany’s top court smoothed the way for Berlin’s participation in bailout packages.

“The key is European banks,” said Jack DeGan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire. “We are trading day to day on the progress of the ECB (European Central Bank) and the European officials in dealing with their credit crisis, and everyday you get a piece of news that will move our market. Today, it was good.”

US investors have also been encouraged by upbeat financial data – better-than-expected numbers from the US services sector and reports of new efforts by President Obama’s government to create jobs there.

European shares jumped back strongly from the two-year lows they slumped to yesterday and the euro was up against a range of currencies.

Analysts said it was good that the German court ruling had avoided a “total chaos” situation for the euro zone but they warned that what we are seeing on both sides of the Atlantic is a technical rebound with investors seeking out bargains and the long-term trends remain down.

More about: Economic crisis, Markets, Wall Street

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