Market Recap: Stocks Drop on Worries Over Europe—Again
- Posted on December 28, 2011 at 6:32pm by
Becket Adams
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Markets closed down on Wall Street today:
- Dow -1.14 percent
- S&P -1.25 percent
- Nasdaq -1.31 percent
- Oil -1.78 percent
- Gold -2.55 percent
On the commodities front:
- Oil (NYSE:USO) fell to $99.54 a barrel
- Gold (NYSE:GLD) falling to $1,554.80 an ounce
- Silver (NYSE:SLV) fell 6.02 percent to settle at $27.01
(Related: China Signs Deal to Exploit Afghanistan’s Oil and Natural Gas Reserves)
Today’s markets were down because:
1) Holidays: Trading will be light throughout the holiday week, and so far little has happened in the U.S. market, leaving investors with few economic or corporate cues.
However, low trading volumes can lead to more pronounced swings that today pulled the three major indices down more than 1 percent. With little news to rock markets today, investors are instead looking at the bigger picture — the U.S. economy has shown signs of “improvement” in terms of consumer spending and unemployment, but the debt crisis in Europe continues to threaten the global economic outlook, and could reverse progress made in the last quarter.
2) Euro: European equities advanced earlier in today’s session after an Italian debt auction where short-term borrowing costs were halved, which could be a good sign for a sale of longer-dated bonds on Thursday. However, those gains were short-lived, as the euro fell to $1.2938, its lowest since January. With little else for investors to latch on to, the declining euro sparked a sell-off in early morning trading that continued throughout the day.
3) Oil: Iran has threatened to cut off access to the Strait of Hormuz, a vital artery through which one-fifth of the world’s oil supply is transported, if the U.S. follows through on planned economic sanctions meant to thwart Iran’s nuclear ambitions.
The sanctions would substantially reduce Iran’s oil revenue by penalizing foreign corporations doing business with Iran’s central bank, which collects payment for most of the country’s energy exports. Oil exports finance as much as half of Iran’s budget. Iran’s response — to threaten blocking access to the strait — may have been calculated to cause a spike in oil prices, which rose above $100 a barrel shortly after the threat was issued, as a warning to American trading partners against joining the new sanctions, but that does not mean that it won’t follow through on its threat should the U.S. continue to threaten the nation’s livelihood.
[Editor’s note: the above is a cross post that originally appeared on Wall St. Cheat Sheet.]
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welloddyfriggindah
Posted on December 29, 2011 at 9:33amGod, grub, guns, ground, gas, more gold…mmm…maybe next summerish
Report Post »Ironeagle
Posted on December 29, 2011 at 9:33amAnd the roller coaster ride continues…it’ll be up today.
Report Post »lukerw
Posted on December 28, 2011 at 8:51pmStop trying to Profit… and Start trying to Protect!
Report Post »TRILO
Posted on December 28, 2011 at 7:48pmBlah…blah….blah. Someone can say the sky is blue and the market jumps like all is well or they sell off with no rhyme or reason. It is the same damn news every day. Market up on rumors.. Market down on rumers… The market is rigged for the big players and it is so overpriced with phony paper and derivatives that people are going to really get burned when the cr@p hits the fan. Just read an article today where many of the big players are slowly pulling their $$ out of paper and putting it into physical assets. There is not enough real assets backing the paper gold, silver, oil or other commodities contracts. When people finally figure that out, look out…because then the SHTF.
The downfall of MF Global should tell everyone who has a half of a brain to get the he!! out of the rigged and bogus market. JP Morgan gets bailed out with investor $$ together with the help of the regulators and bankruptcy court and the little guy gets the BIG SHAFT!. Yet “no one” knows where missing billion dollars went. A BILLION DOLLARS goes missing and no body knows where???!!! Crooks at every level. The market disgusts me as much as the politicians in DC!
Get out of the market now before there is nothing left except the dust on the floor of the New York Stock Exchange.
Report Post »Stoic one
Posted on December 28, 2011 at 7:06pmHormuz just what the potus is looking for? a ‘real’ war to campaign on? He is certainly capable of doing that so as to get reelected.
Report Post »AxelPhantom
Posted on December 28, 2011 at 7:01pmJust wait until it becomes apparent that the little patch they pasted on over the big hole in their innertube in the EU is leaking fast!
Report Post »EchoHawk
Posted on December 28, 2011 at 6:50pmThe markets and speculators are schizophrenic. They must all be conservatives.
Report Post »welloddyfriggindah
Posted on December 29, 2011 at 9:38amA lot of conservatives got out of the market and battened down the hatches when we saw that America was choosing Mr O and the glorious European model of destruction. But yes, the schizo’s stayed in!
Report Post »Robert-CA
Posted on December 28, 2011 at 6:47pmEarn $100 per day & spend $200 per day .
Report Post »Now where anything can go wrong with that ?
Justthefactsmam
Posted on December 28, 2011 at 6:42pmPresident Obama’s shoud be to quote as Dirty Harry Said, “Do ya feel Lucky, Punk? Well, do ya?” Ya, that’ll happen…
Report Post »Justthefactsmam
Posted on December 28, 2011 at 6:50pmOr we end up in a catch-22…the Iranings close off the Srtaights of Hormuz, or we clog it by sending their navy to the bottom of it…
Report Post »