Stocks Mixed after China Hiked Rates

U.S. stocks were mixed in early trading on Wednesday, after China said it will raise interest rates by a quarter-point and Moody Investor Services’ downgrade of Portugal’s debt late Tuesday. The Dow Jones Industrial Average lately rose 8.70 points to 12,578.57. The Standard & Poor’s 500 Index fell 2.77 points to 1,335.11. The Nasdaq Composite Index fell 3.05 points to 2,822.72.

China raised a key interest rate Wednesday for a third time this year as it tries to cool surging inflation. The benchmark rate for one-year loans will be raised 0.25 percentage points to 6.56 percent, effective Thursday, the central bank announced.

 Moody’s downgraded Portugal’s debt to junk status late Tuesday. That raised fresh concerns about the strength of the European financial system.

Greek banks are willing to roll over their government bonds as part of a European Union aid plan, Finance Minister Evangelos Venizelos said, as debt- holders meet in Paris today to discuss their role in rescuing the country.

Nearly a third of European Union banks being tested for their resilience in bad markets may need some outside support, credit rating agency Moody’s said on Wednesday. The European Banking Authority (EBA) was expected to announce the results of its stress test next week. Analysts expect more failures than the seven recorded last year as regulators seek to boost credibility in the exercise.

Oil prices slipped to near $96 a barrel Wednesday. By early afternoon in Europe, benchmark oil for August delivery was down 80 cents to $96.09 a barrel in electronic trading on the New York Mercantile Exchange. Crude gained $1.95 to settle at $96.89 on Tuesday.

Walgreen Co. said Wednesday that its June same-store sales rose 4.8%.  Total sales climbed 6.8% to $6.04 billion.