Market Recap: Skyrocketing Italian Borrowing Costs Lead to Massive Sell-Off
- Posted on November 9, 2011 at 4:27pm by
Becket Adams
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Markets closed down on Wall Street today:
- Dow -3.20 percent
- S&P -3.67 percent
- Nasdaq -3.88 percent
- Oil -0.80 percent
- Gold -1.65 percent
On the commodities front:
- Oil (NYSE:USO) fell to $96.03 a barrel
- Gold (NYSE:GLD) falling to $1,769.50 an ounce
- Silver (NYSE:SLV) fell 3.27 percent to settle at $34.01
(Related: French, German Leaders Contemplate New Euro Zone)
Today’s markets were down because:
1) Italy: Stocks sold off sharply right out of the gate this morning as Italy’s borrowing costs rocketed past the 7 percent level that drove Greece, Ireland, and Portugal to seek bailouts. The sell-off only intensified in the afternoon amid reports that European Union officials had no plans to rescue Italy, the euro zone’s third-largest economy. The news not only led to a slump in U.S. markets, but European markets as well, while the euro fell more than 2 percent against the dollar.
2) Greece: After Prime Minister George Papandreou announced plans to step down over the weekend, handing over the reins to a unity government tasked with pushing through austerity measures required to secure bailout funds, the world turned its eyes instead to Italy, though apparently a bit too soon.
It was all but settled earlier today that that House Speaker Filippos Petsalnikos would head Greece’s new coalition government, only for it to emerge hours later that there was no successor due to feuding between the two main political parties. And unless the new government, which has yet to take shape, can push through budget reforms to secure emergency funding from the European Union and International Monetary Fund, Greece will run out of money next month and default on its debt.
3) Banks: Bank stocks were among the biggest losers in today’s market sell-off, with Citigroup, Goldman Sachs, and Morgan Stanley down more than 6 percent. JPMorgan, Bank of America, and Wells Fargo shares fell more than 4 percent.
[Editor's note: the above is a cross post that originally appeared on Wall St. Cheat Sheet]
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mkurbo
Posted on November 10, 2011 at 3:20amU.S. has helped Europe:
WWI
WWII
Marshall Plan
Cold War Period (resisting communist expansion)
Policing the Middle East (oil supply)
WWIII (war on terrorism)
———————————
In the end it was the economic disease of socialism that took them down to their knees and America wasn’t around to help because Europe had previously exported their disease to the U.S. and liberals embraced it as their ideology for utopia.
The End.
Report Post »ThomastonPaine
Posted on November 9, 2011 at 9:26pmNaked Credit Default Swaps Must Be Banned…The Ties That Bind “Too Big To Fail”
Outstanding “60 Minutes”
http://www.cbsnews.com/video/watch/?id=4546583n
“The 29 Global Banks That Are Too Big To Fail”
http://www.forbes.com/sites/afontevecchia/2011/11/04/the-worlds-29-most-systemically-important-banks/
Report Post »wntsmallgov
Posted on November 9, 2011 at 7:47pmDoes any think obama will get the message? I expect we will have riots just like greece in less than a year and obama will declare Martial Law and will crown himself king.
Report Post »hidden_lion
Posted on November 9, 2011 at 8:00pmThat is why God created the scope
Report Post »pointman
Posted on November 9, 2011 at 5:55pmJust Bubba: My guess is the fed will step in to “stabalize” things over the next year so that a collapse in Europe won’t have an affect on our elections Nov. Just a guess, I’m no economist, but I know the markets don’t like volatility.
Report Post »RightPolitically
Posted on November 9, 2011 at 5:27pmIt won’t be long now.
Report Post »BONETRAUMA
Posted on November 9, 2011 at 5:26pmGet ready 4600 dow on the way. This is not going to be pretty.
Report Post »thegreatcarnac
Posted on November 9, 2011 at 5:25pmGeorge Washington expressed his opinion about getting too entrenched politically, socially, or economically in Europe or really with anyone. He said not to do it. He said to be independent and not tied to other lands. We should have listened to him.
Report Post »RightPolitically
Posted on November 9, 2011 at 5:29pmGreat point.
Report Post »pointman
Posted on November 9, 2011 at 5:23pmAny bets on how long before the U.S. Fed steps in to bail out the Eurozone?
Report Post »Just_Bubba
Posted on November 9, 2011 at 5:45pmThere was a flight to the $ today as everyone is convinced we are the last best bet…wrong. As the reserve currency of the world they will be safe in $ except for the fact that we are devaluing it as we sit here. It seems as though they are all willing to accept money that will buy 50 cents on the dollar vs their own currency which will be worth nothing in purchasing power. What you will be able to buy with the $ will be a moving target but it will still be better than other fiat currencies. Got FOOD?
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