Market Recap: Stocks Blow a Fuse on Greece, Earnings

Markets closed up on Wall Street today: 

• Dow -0.26 percent
• S&P-0.10 percent
• Nasdaq +0.09 percent
• Oil -0.44 percent
• Gold -0.77 percent

On the commodities front:

• Oil (NYSE:USO) fell to $99.14 a barrel
• Gold (NYSE:GLD) down to $1,665.30 an ounce
• Silver (NYSE:SLV) fell 0.91 percent to settle at $31.98

(Hot Feature: Obama Will Push for Tax Reform in State of the Union Address)

Today’s markets were slightly up because:

1) Greece: Negotiations with Greece’s private bondholders reached a stalemate today after euro-zone finance ministers rejected their latest proposal. Private investors in Greek debt are demanding a coupon of at least four percent on new, longer-dated bonds to be issued in exchange for their existing Greek holdings if they are also to accept a 50 percent writedown on the nominal value of their debt holdings.

But Greece says it is not prepared to pay a coupon of more than 3.5 percent, and euro-zone finance ministers backed that position at a meeting in Brussels on Monday, raising the risk of Greek default as the heavily indebted nation hurtles toward a 14.5 billion-euro bond redemption in March.

2) IMF: The International Monetary Fund warned on Tuesday that the ongoing European debt crisis is casting a shadow on the economic outlook for most of the world as it lowered its growth forecasts for all but one country: the United States.

The IMF now expects the global economy to grow 3.3 percent in 2012, according to an update to its World Economic Outlook, down from a 4 percent September projection, while its forecast for U.S. growth remains at 1.8 percent in 2012. According to a separate IMF report, Europe’s sovereign debt crisis and banking problems are posing increased risks to the global financial system, and euro governments must do more to stabilize public finances and prevent a deeper credit freeze in the banking sector.

3) Earnings: While Europe remains the primary area of concern for investors, its is now the height of earnings season, and good or bad quarterly reports also have their effect on the markets, though it might not be so broad.

Dow components Verizon, McDonald’s, and Travelers Cos. were all dragging on stocks today after reporting disappointing earnings, while Johnson & Johnson was flat after its earnings report. After the bell today, tech heavyweights Apple and Yahoo! will announce their results.

[Editor’s note: the above is a cross post that originally appeared on Wall St. Cheat Sheet.]