After initial sharp drops late last week, global markets are stabilizing following an announcement that Dubai World, the main investment arm of the Persian Gulf city-state, asked to defer payments on $60 billion in debt for six months.
There was worry that a debt default could touch off a new round of credit market worries, which plagued stocks last year as Lehman Brothers collapsed and banks stopped lending to each other.
However, it appears there is limited exposure to the debt in the U.S., which has eased some concerns. The United Arab Emirates, where Dubai is located, also said Sunday it will make extra funding available to all banks in the country, including foreign banks with local offices.
Analysts say European banks have more exposure than their U.S. counterparts. Asian stocks rallied sharply on Monday, while European markets were lower. Dubai's market, which was opened Monday for the first time since the debt deferment announcement, fell nearly 6 percent.
Some encouraging signs from U.S. consumers helped to offset concerns about fallout from the Dubai debt crisis. Consumer spending accounts for more than two-thirds of all U.S. economic activity, so a robust holiday shopping season would put investors at ease that the economy is recovering.
Investors have been worried that rising unemployment would make shoppers uncomfortable about spending during the holidays. A key report on the nation's unemployment rate is due out Friday.
Preliminary figures by ShopperTrak, a research firm that tracks more than 50,000 outlets, showed sales rose 0.5 percent on Friday, the kickoff to the holiday shopping season. Online sales jumped 11 percent Thursday and Friday, according to comScore, an Internet research firm.
In early trading, the Dow Jones industrial average rose 25.70, or 0.25 percent, to 10,335.62.
Yesterday’s Top Performing Small Cap stock:
Gen2Media Corporation (OTC BB: GTWO) was a SmallCapVoice.com top performer yesterday closing up less than 1% on trading volume of 29,000 shares.
Gen2Media Corporation, a full service video technology and production company, has been chosen to create the background images for the Black Eyed Peas performance at the 2009 Victoria's Secret Fashion Awards. The Black Eyed Peas open with an exciting performance of Meet Me Halfway in which Gen2Media uses its industry-leading proprietary technology to create stunning video imagery in the background.
Gen2Media is a fully integrated technology, production and marketing company whose proprietary and patent-pending technology has earned the trust of a growing, globally diversified customer base. Leading media companies, corporations, chart-topping artists, entertainment groups, advertising agencies, and national brands such as Mary J. Blige, Britney Spears, Justin Timberlake, Microsoft Xbox LIVE, Coca-Cola Company, Toyota, Clear Channel, and others use Gen2Media’s services. The company's video publishing technology enables businesses of all kinds and sizes to easily publish online video, and manage media content and advertising delivery.
Today’s SmallCapVoice.com Hot Stocks to Watch:
Metatron, Inc. (Pink Sheets: MRNJ)
Metatron, Inc. recently announced that it has completed the acquisition of PB Magic, Inc. for five million shares of its restricted common stock valued at $0.15 per share.
Founded in 2000, PB Magic provides web hosting, design, development, custom programming, database integration, and PPC/SEC advertising campaign management to Fortune 500, public sector and small business clientele. The firm has been engaged by hundreds of high profile clients throughout its history including Boeing, Scudder Investments, ADM, and Yum! Brands (Kentucky Fried Chicken), and has averaged approximately $1.5 million in profitable revenue per year since inception.
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