() - The major U.S. index futures are pointing to a lackluster opening on Monday, as traders digest the details of the bailout of Ireland amid continued uncertainty about financial stability in Europe. A lack of significant economic news from the U.S. may also lead to choppy trading, as the markets look ahead to the release of key reports on employment and national manufacturing activity later in the week. Additionally, some traders may remain away from their desks following last week’s holiday.
European finance ministers and officials from the International Monetary Fund have reached an agreement regarding an 85 billion euro financial assistance package for the Republic of Ireland. The deal will see 35 billion euros go to propping up the Republic’s banking system, while the remaining 50 billion euros will cover the day-to-day financing of the state. The average interest payable on the financial package will be 5.8%, higher than the 5.2% paid by Greece for its bailout earlier in the year.
U.S. stocks meandered to a mixed close in the week ended November 26th, as the markets suffered a double-whammy of negative news from Europe and Asia. After an uneasy calm that prevailed since May, when Greece was bailed out, concerns about the European sovereign debt crisis resurfaced, as Ireland was found mired in a crisis due to problems at its financial institutions.
The development led to fears that other European nations may also be on the verge of acknowledging their troubles. Even as the debt crisis soured sentiment, North Korea provoked its neighbor South Korean with an artillery attack, spreading a wave of panic across the Asia-Pacific region.
Last Monday, traders showed uneasiness about the unraveling Irish debt crisis, resulting in some lackluster trading. The Dow Industrials and the S&P 500 Index ended modestly lower, while the Nasdaq Composite closed in positive territory. Meanwhile, the North Korea-South Korea stand-off and the Irish travails send stocks sharply lower on Tuesday, with all three of the major averages declining by over 1%.
Stocks rebounded strongly on Wednesday, however, as the jobless claims report and some encouraging consumer readings generated notable buying interest. Nonetheless, the major averages retreated in the truncated session on Friday that followed the Thanksgiving Day holiday on Thursday.
For the week, the Dow Industrials and the S&P 500 Index ended down about 1% and 0.86%, respectively, while the Nasdaq Composite Index added 0.65%.
Among the sector indexes, the KBW Bank Index fell 3.02% for the week, while the NYSE Arca Oil Index, the Philadelphia Oil Service Index, and the NYSE Arca Securities Broker/Dealer Index all ended down over 2% each. On the other hand, the Philadelphia Semiconductor Index and the S&P Retail Index gained over 2% each.
