Nov 3 - Wall Street had its best gains in a week as Greek Prime Minister George Papandreou backed down from a vote that could have thrown global financial markets into a tailspin. Conway G. Gittens reports.
As the G20 meeting in Cannes, France wrapped up. German Chancellor Angela Merkel stood firm, saying euro stability has priority over Greek membership. But in Athens, Prime Minister George Papandreou backed down, no longer calling for Greeks to vote on leaving, or staying, in the euro zone. Papandreou faces a confidence vote on Friday. In the United States, focus was also on the economy. Most U.S. retailers posted disappointing October store sales compared to a year ago, which means consumers are nervous heading into the holidays; growth in the massive U.S. services sector slowed to its slowest pace in three months, but in a positive - weekly jobless claims fell below 400,000 for the first time in more than a month. But even in America, what happens next depends on what happens in Europe, explains Fordham University Professor Laura Gonzalez. SOUNDBITE: LAURA GONZALEZ, ASSISTANT PROFESSOR OF FINANCE AND ECONOMICS, FORDHAM UNIVERSITY (ENGLISH) SAYING: "Corporate America has cash but they are afraid to hire because of the volatility in the markets. And this is not likely to change for at least two years. The situation in Greece needs to be cleared out. The markets all around the world need to know whether Greece is leaving the European Union or not." But with the Greek situation seemingly headed for a positive resolution, investors took heart, pushing U.S. stocks higher in the biggest gains in a week. In Europe, a surprise rate cut by new European Central Bank President Mario Draghi led to optimism the ECB will do what it can to help prevent Europe from slipping into recession. That led to gains across the board, with Germany leading the pack in a rally of almost 3 percent. Conway Gittens, Reuters