(IBTimes) - Wall Street slumped in early trading session amid concerns about the increase in difficulty in handling the sovereign debt crisis in the Eurozone after French and Greek elections. Shares recovered later in the day as European bourses rebounded. The DJIA and the S&P 500 indices ended the day at -0.23% and +0.04% respectively. In the commodity sector, crude oil initially plummeted but then rebounded to close almost flat. The front-month contract for WTI crude oil initially plunged to 95.34, the lowest level in almost 5 months, before closing at 97.94, down -0.56% while the equivalent Brent crude contract declined a 3-month low of 110.34 before settling at flat at 113.16. Gold changed little during the day.
The result for the Greek election is that the 2 pro-bailout parties, New Democracy and Pasok, secured only 149 out of 300 seats and New Democracy leader antonis Samaras stated that he has failed to form a coalition government. It's time for Syriza Party leader Alexis Tsipras to attempt to form one. Then Pasok's Evangelos Venizelos would try to do so if Tsipras also fails to form a coalition government. Eventually, if none of the parties can successfully form a government, a reelection will be held in June. The uncertainty in Greece has increased the volatility of financial markets.
Concerning the victory of François Hollande in the French election, Germany's Chancellor Merkel said she would welcome the new French President with 'open arms' and work closely with him. This has raised hopes that Germany will strengthen its relationship with France. Yet, she opposed any renegotiation of the EU fiscal compact. Meanwhile, Volker Kauder, a senior member of Merkel's party, has said "Germany is not here to finance French election promises".
Concerning the dataflow, the Eurozone Sentix Investor Confidence surprisingly fell to -24.5 in May from -14.7 a month ago. The market had anticipated a milder drop to -15.3. Germany's factory orders unexpectedly rose +2.2% m/m in March after a upwardly revised +0.6% in February. The Eurozone's biggest economy will report industrial production data which probably climbed +0.8% m/m in March following a drop of -1.3% in the prior month.
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