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NEW YORK (TheStreet) -- The S&P 500 Index had a bumpy ride last week as it tumbled 5% in the first two days on the eve of the Group of 20 summit in Cannes, France, as the Greek Prime Minister proposed a referendum on the European debt deal. This political move risked scuttling the hard-fought deal that had been unveiled the prior week that contributed to the powerful stock market rally. Stocks recovered most of the lost ground later in the week as the Prime Minister withdrew his call for a referendum and moved toward establishing a new government for Greece that is very likely to approve the controversial debt rescue package. However, the political brinkmanship derailed plans by the leaders of Germany and France to showcase the new plan in order to secure funding support from China and other countries.The French President said it may take until Feb. 2012 for a funding deal to be reached, kicking the implementation of the plan down the road well past the meeting in Cannes. While hurdles to implementation of the debt plan are materializing, Italy's 10-year borrowing costs are slowly nearing the 7% threshold that forced Greece, Ireland and Portugal to seek bailouts last year. The yield on Italy's 10-year bond rose to 6.35%, the highest since the creation of the euro currency in Jan. 1999. We expect the delay will force changes in the Italian government and result in the passage of the difficult, but necessary reforms to return to a sustainable fiscal path. With every move in the stock market seeming to coincide with a headline coming out of Europe, it would be easy to conclude that this is the only issue that matters to investors. By stepping back from the day-to-day and week-to-week trading, we can see a different, longer-term pattern of performance emerging -- one that reflects a different focus entirely. If we look back at the past five years, we can see that stocks have very closely tracked real-time economic data, as measured by the weekly tally of initial claims for unemployment benefits as seen in Chart 1. It appears the issues in Europe over the past couple of years have merely created volatility around the true focus of investors on the fundamental economic backdrop that continues to slowly improve. Add Comment Tweet 1 2 Last » Next › adsonar_placementId=1341527;adsonar_pid=879768;adsonar_ps=-1;adsonar_zw=600;adsonar_zh=280;adsonar_jv='ads.adsonar.com'; try { function DM_onSegsAvailable(segs, cust_id) { for (var i=0;i //* Global Functions *// function metadataRegisterNS(ns){ var nsParts = ns.split("."); var root = window; for(var i=0; i Dow Jones S&P 500 NASDAQ 10-Year Note 12032.21 1261.62 2693.0 20.12 Oil * 114.99 DOWN -36.18 UP 0.5 DOWN -2.25 UP 0.18 10 Yr 2.01% SPDR Gold 175.33 -0.3% 0.04% -0.08% 0.9% Data delayed 20 minutes Top Stories and Tools var randnum = Math.floor(Math.random() * 100) if (randnum < 50) { document.write("10 Things Still Made in America"); document.write("Dividend Calendar: Find Ex-Dividend Dates"); document.write("30 New Android Apps for 2011"); document.write("10 Cult TV Shows Netflix Should Revive"); document.write("Today's Top-Rated Stocks (by Industry)"); document.write("FREE NEWSLETTER: Dividend & Income Investor"); } else { document.write("10 2011 Cars You Should Buy Now"); document.write("17 Products That Were Invented by Accident"); document.write("9 Completely Worthless Collectibles"); document.write("2011 Bank Ratings and Safety Screener"); document.write("13 Ugliest Phones of the Mobile Era"); document.write("10 Disastrous PR Moves by Companies"); } Twitter Facebook RSS Mobile App TSCM.ads.AdPlacerx.sz = "336x280,336x850,300x250,468x648"; TSCM.ads.AdPlacerx.resetTargets(); TSCM.ads.AdPlacerx.calltype = "adj"; TSCM.ads.AdPlacerx.additionalTargeting = ";;storytype=opinion;kval=opinion;;storytype=opinion;kval=opinion"; TSCM.ads.AdPlacerx.writeTag(); adsonar_placementId=1341369;adsonar_pid=879768;adsonar_ps=-1;adsonar_zw=320;adsonar_zh=280;adsonar_jv='ads.adsonar.com'; Brokerage Partners Free Newsletters from TheStreetAfter the Bell
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