Wall Street pauses for a breath after the surge

Wall Street stocks were mixed?lower Thursday, a day after the Dow Jones Industrial Average had its biggest gain in more than two years.

Stocks were under pressure after the government reported that jobless claims leapt for the second week in a row, raising worries about tomorrow's crucial monthly employment report.

The data cut into some of the euphoria induced Wednesday after?major central banks?cut borrowing costs to inject money into the global financial system.?Investors are once again seeking signs that European leaders can find a solution to the debt crisis there.

Markets jumped Wednesday when the central banks of Europe, the U.S., Britain, Canada, Japan and Switzerland made it cheaper for banks to borrow dollars, helping them to operate smoothly at a time of tight credit.

The central banks' move sent the Dow soaring 490 points, or 4.2 percent, the largest gain since March 2009 and the seventh-largest of all time. The Standard & Poor's 500 closed up 4.3 percent.

China's central bank also acted to release money for lending and shore up growth by lowering bank reserve levels for the first time in three years.

Worries about Europe's financial system and the European Central Bank's reluctance to intervene heavily in bond markets have seen borrowing rates rise for European countries in recent weeks. That raised fears of a global credit crunch of the type that plunged the global economy into recession in 2009.

As a result of the central banks' action, commercial banks in the EU and four other countries will now be able pay less to borrow dollars, the currency of international trade.

But analysts said that the decision might only have a short-term effect and does nothing to solve the underlying problem of an enormous government debt in Europe. Investors say the real boost to the markets might come only if European leaders announce a dramatic action at the summit on debt crisis next week.

The Associated Press contributed to this report.

Source: http://bottomline.msnbc.msn.com/_news/2011/12/01/9140047-wall-street-pauses-for-a-breath-after-the-surge

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