Investors appear unperturbed by the outcome of European elections, with the likelihood new leadership in France and Greece will continue the euro zone's efforts to fight its sovereign debt crisis.
BUSINESSDESK: Investors appear unperturbed by the outcome of weekend elections in Europe, with the likelihood that new leadership in France and Greece will remain on board with the euro zone's efforts to fight its sovereign debt crisis.
After French voters opted to replace president Nicolas Sarkozy with socialist Francois Hollande and Greek voters booted the previous coalition government from power, European Union leaders expressed optimism that efforts to reduce budget deficits will remain in place even as efforts heighten to bolster growth in the region.
“This discussion is not whether we should pursue consolidation or growth, it’s completely clear that we need both,” German Chancellor Angela Merkel told reporters in Berlin today.
“Rather, I think the core of the discussion is whether we again need debt-financed economic programmes, or whether we need growth elements that are sustainable and oriented toward the economic strength of certain countries.”
Meanwhile, positive data from Germany underpinned hopes that the EU's largest economy might remain more resilient than anticipated.
The nation's factory orders, adjusted for seasonal swings and inflation, rose 2.2% in March, accelerating from a revised 0.6% increase in February and surpassing the 0.5% advance forecast by economists surveyed by Bloomberg.
Europe's Stoxx 600 Index ended the day with a 0.7% advance for the session.
“The perception is that European governments are not going to do anything stupid,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, told Bloomberg News.
“We’re talking about changes on the margin. We’re not talking about a wholesale change in fiscal policy.
"There was a big reaction to well telegraphed news. It’s good to see a bounce from the lows.”
Even so, the euro fell to $US1.2955, before last trading at $US1.3064 in afternoon trading in New York.
Ahead of the close, the Standard & Poor's 500 Index rose 0.26% and the Nasdaq Composite Index gained 0.30%.
The Dow Jones Industrial Average was down 0.10%.
Some analysts are looking anxiously at key levels for the S&P 500, which was last trading at 1372.71.
"The S&P 500 failed to hold above its 1395 breakout point last week and will look to hold its April 1360 low in the coming days to weeks," Ari Wald, a technical analyst at Brown Brothers Harriman, told Reuters.
"A failure to hold 1360 would confirm lower highs and lower lows for the first time since October."
Berkshire Hathaway has been adding to its shareholdings of two US companies in recent days, billionaire investor Warren Buffett said yesterday.
Mr Buffett also forecast record results this year for Berkshire's largest non-insurance businesses among them the railroad BNSF and the utility MidAmerican, according to Reuters.
