Stocks vacillated between gains and losses today, following the biggest two-day gain the S&P had since January, after the S&P boosted its outlook for America. ‚??The S&P upgrading of U.S. debt is certainly good in a sense that it takes the issue off the table,‚?Ě Derek Sasveld, a New York-based senior portfolio manager for ING Investment Management U.S. said. ‚??But the market was already aware that government finances were in a better shape, an increasingly better shape.‚?Ě
S&P Raises Credit Outlook (CNBC)
Today the S&P upgraded its credit outlook for the U.S. government from ‚??negative‚?Ě to ‚??stable‚?Ě, stating that the chances of a downgrade of the country‚??s rating is ‚??less than one in three.‚?Ě This marks a reversal from August 2011, when the S&P became the first credit rating agency to downgrade U.S. credit from top-rated ‚??AAA‚?Ě to ‚??AA‚?Ě, the second highest rating. The credit agency, however, is skeptical of Washington policymakers tackling further issues due to partisanship. “We believe that our current ‘AA’ rating already factors in a lesser ability of U.S. elected officials to react swiftly and effectively to public finance pressures over the longer term in comparison with officials of some more highly rated sovereigns and we expect repeated divisive debates over raising the debt ceiling,” the agency said.
Dollar Rallies against Yen (Reuters)
The dollar rose sharply against the yen today, strengthened by stronger-than-expected Japanese data and the aforementioned credit upgrade. “The revised rating is positive news for the dollar but I do not see it being a major catalyst. This is just the latest indication that we are seeing a broad stabilization and improvement in the economy,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.