ECONOMY

Stocks set for cautious start to week

With the first-quarter earnings season wrapping up today, investors this week will be digesting the latest profit figures while keeping an eye on markets abroad. The Athens bourse’s benchmark general index (ATHEX), which ended at 1,570.22 points on Friday, fell 1.56 percent last week on a slide in bank stocks of more than 3 percent. Almost all of the sector’s major players unveiled first-quarter figures last week, showing a sharp drop in profits due to a higher number of bad loans and stagnant credit growth. The tough conditions banks are facing in view of Greece’s deepening recession, have fueled market talk that merger activity will soon take place in the sector. On a global level, markets are likely to make a cautious start to the week after stocks concluded their worst month in more than a year. A Fitch Ratings downgrade of Spain late on Friday drove the three major US stock indexes down 1 percent for the day. For some investors, Fitch’s decision highlighted the need for the European Central Bank to come up with a stronger response to the debt crisis, one that will help stocks rally. The US stock market will be closed today for the Memorial Day holiday.