'Whiplash': Tense Markets Show Volatility Investors react to a tough week: first, lots of bad news and then, an encouraging jobs report on Friday morning from the Labor Department. Melissa Block talks to NPR's Yuki Noguchi, who recaps what happened.
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'Whiplash': Tense Markets Show Volatility

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'Whiplash': Tense Markets Show Volatility

'Whiplash': Tense Markets Show Volatility

'Whiplash': Tense Markets Show Volatility

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  • <iframe src="https://www.npr.org/player/embed/139032541/139032524" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Investors react to a tough week: first, lots of bad news and then, an encouraging jobs report on Friday morning from the Labor Department. Melissa Block talks to NPR's Yuki Noguchi, who recaps what happened.

MELISSA BLOCK, Host:

In a moment, we'll hear about the effect that Europe's troubles are having on the markets here, but first, NPR business correspondent Yuki Noguchi joins us with more on the markets today. And, Yuki, when you say it was volatile, just how volatile was it?

YUKI NOGUCHI: So, in general, Melissa, there's a tension in the markets. On the one hand, there's sort of the long-term stuff about slow growth and unemployment, which is pretty consistently bad. And then, there's sort good news, like we had today, and investors react to that as well.

BLOCK: You mentioned Europe's debt problems, Yuki. What happened there today, and how is that affecting what we've seen on the markets, specifically?

NOGUCHI: And, you know, if this all sounds familiar, it's a lot like what happened in Greece. I mean, the country struck a deal earlier this year with the IMF, you know, a bailout, (unintelligible) for austerity. But it was very messy, and there was a lot of investor fallout.

BLOCK: Why exactly does what's happening in Europe, in countries such as Greece and Italy and Spain, matter so much to the U.S. and to the markets?

NOGUCHI: Well, U.S. banks have a lot of European debt, right? So they stand to lose a lot of money if there is a European meltdown. And what's interesting is that on the one hand, you know, Wall Street likes to say they hate this government intervention. On the other hand, when, you know, things get really sour and there's a serious situation, they love nothing more than some monetary intervention.

BLOCK: And so that means there are politicians and regulators out there thinking about ways to calm the markets. What could the White House do?

NOGUCHI: Not a whole lot. I mean, President Obama acknowledged some of the challenges that the U.S. is facing.

P: We've weathered the Arab Spring's effect on oil and gas prices; the Japanese earthquake and tsunami's effect on supply chains; the extraordinary economic uncertainty in Europe; and recently markets around the globe have taken a bumpy ride.

NOGUCHI: So President Obama argues that the U.S. economy needs some extra help. He called on Congress to extend the payroll tax cuts and an extension of the emergency unemployment benefits, both of which are set to expire at the end of this year. And, you know, he said that when you have growth it sort of pays for itself. But politically, you know, it's going to be a tougher sell because Congress's posture is now to cut the deficit. And as far as Europe goes, I think, you know, the White House just wants to calm investor worries, and it wants to avoids a panic, because, as we saw in 2008, that didn't help matters. It was a vicious cycle.

BLOCK: OK. NPR business correspondent Yuki Noguchi. Yuki, thanks very much.

NOGUCHI: Thank you, Melissa.

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