Market Recap: MF Global Puts Spotlight on Europe, Banks

Markets closed down on Wall Street today:

• Dow -2.25 percent
• S&P -2.47 percent
• Nasdaq -1.93 percent
• Oil -0.79 percent
• Gold -1.51 percent.

On the commodities front:

• Oil (NYSE:USO) fell to $92.58 a barrel.
• Precious metals: Gold (NYSE:GLD) down to $1,720.90 an ounce while Silver (NYSE:SLV) fell 2.56 percent to settle at $34.39.

Hot Feature: How Will Precious Metals React to the EU Bailout Plan?

Today’s markets were down because:

1) Europe: Italian and Spanish bond yields soared, prompting the European Central Bank to buy the debt. Meanwhile, though European leaders agreed last week to increase the European Financial Stability Facility rescue fund to 1 trillion euros, they are now facing difficulties finding outside contributors.

At the same time, MF Global Holdings Ltd. (NYSE:MF), the futures broker that made big bets on European sovereign debt, filed for U.S. Chapter 11 bankruptcy protection today after talks to sell its assets fell through. While the worst-case scenario for Europe seems off the table, at least for now, they still have a long way to go to shore up the region’s finances.

2) Currency: The Japanese government stepped in early Monday to push down the yen’s value in international currency markets. The move immediately sent the dollar rising against major global currencies on safe-haven demand, putting pressure on commodities priced in dollars, such as oil and gold. The dollar climbed 2.9 percent against the yen.

3) Banks: JPMorgan (NYSE:JPM), which, according to an MF Global court filing, has about $1.2 billion worth of claims on the brokerage, fell 5.26 percent to $34.76, leading banking stocks lower.

Goldman Sachs (NYSE:GS), Citigroup (NYSE:C), Morgan Stanley (NYSE:MS), Bank of America (NYSE:BAC), UBS (NYSE:UBS), and Wells Fargo (NYSE:WFC) were among the worst-performing stocks today.

[Editor's note: the above is a cross post from Wall St. Cheat Sheet]