Stocks Opened Lower on Euro Worries

U.S. stocks opened lower on Wednesday as worries about a recession in Europe  outweighed hopes that the U.S. economic recovery will gather steam and help corporate earnings. The Dow Jones Industrial Average lately fell 40.41 points to 12,422.06. The S&P 500 Index declined 3.74 points to 1,288.34. The Nasdaq Composite shed 3.71 points to 2,698.79.

Germany’s economy slipped into reverse in the last quarter of 2011 in spite of showing strong overall growth for the year of 3 percent, the country’s Federal Statistics Office said Wednesday. While the overall 2011 growth figure was as expected by analysts, the statistics office also said that the German economy likely contracted by 0.25 percent in the last quarter of 2011.

A new EU fiscal treaty will only allow euro zone countries to incur budget deficits during severe economic downturns in the euro zone or other exceptional events, according to a draft of the document obtained by Reuters on Wednesday.

Debt-crippled Greece’s budget deficit is expected to hit 9.6 percent of economic output in 2011, about half a percentage point above target, the development minister admitted Wednesday.

Applications for U.S. home mortgages rose in the first week of the year as demand for both purchases and refinancing perked up, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 4.5 percent in the week ended Jan 6.

Twinkies and Wonder Bread maker Hostess Brands Inc filed for bankruptcy protection for the second time in less than three years, after failing to reach an agreement with workers on pension and health benefits. Hostess’ declining financial performance, crippling legacy costs associated with its pension plans and massive debt levels led the company to Chapter 11 bankruptcy, court  papers showed on Wednesday.






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