U.S. stocks closed sharply lower Monday as simmering worries about Europe's debt problems boiled over, sending investors in search of safety.
On Friday, rating agency Fitch cut Greece's credit rating by three notches to "highly speculative," putting it in junk bond territory. In addition, Standard & Poor's slashed Italy's outlook to 'negative' from 'stable.' The downgrades, combined with a weaker-than-expected reading on manufacturing in Europe, renewed concerns about the eurozone's debt crisis.
Furthermore, Spain's ruling Socialist party was hit with its worst election defeat in years over the weekend, as citizens continued to protest the weak economy and high unemployment. [Source: cnnmoney.com]
Market Reflections - Monday, 23rd May, 2011
Stocks sank globally led down by concern that Europe's sovereign debt crisis is getting worse. S&P cut Italy's credit rating on Friday and Fitch Ratings downgraded Greece's credit rating. News of slower manufacturing growth in China and Germany along with a decline in the Chicago Fed national activity index added to the downdraft. Finally, a rise in the dollar weighed on commodities and related equities. The dollar index gained 0.4 percent for the day. The euro fell to 1.405. Despite the sharp drop in equities, Treasury yields were little changed with the 2-year note up incrementally to 0.51 percent and the 30-year bond down marginally to 4.27 percent. The Dow dropped 130.78 points to 12,381.26 while oil futures fell two and a half bucks per barrel to $97.56. Copper fell to $3.98. [Source: bloomberg.com]
Market Focus in the US this evening
A back-to-back sales gain would help ease pessimism over the new home market. [Source: bloomberg.com] ____________________________________________
The DJIA Index finished the last trading session: Down 130.78 points; and The SPI Futures are currently: Down 29 points atm. ____________________________________________
Of note in the US this evening:
New Home Sales [ Market moving indicator]
Eric Rosengren speaks [Boston Federal Reserve Bank President - Speech to a conference on a framework for financial stability and regulatory priorities in St. Petersburg, Russia.]
Elizabeth Duke speaks [Federal Reserve Gov. - Speech on financial education at Boston University.]
Thomas Hoenig speaks [Kansas City Federal Reserve Bank President - Speech to the 29th Annual Monetary and Trade Conference in Philadelphia.]
James Bullard speaks [St. Louis Federal Reserve Bank President - Speech to the Cape Girardeau West Rotary Club in Cape Girardeau, Mo.]
...AND...
Of note in Australia today:
Please note there is no noteworthy 'Economic news' due to report in Australia today.
...AND...
Of note elsewhere today/this evening:
New Zealand - RBNZ Inflation Expectations (YoY) (Q2) [ Merits extra attention]
Gold is currently trading Down $3.10c atm and is sitting at US$1,514.10/oz [Source: Kitco] Oil (Nymex Crude) is currently trading Down $1.02 & is sitting at US$96.68/bbl atm [Source: Bloomberg] The Dollar: The AUD is currently trading @ $1.0486c against the US Dollar [Source: Forex. Live] ____________________________________________
Market moving indicator]
Merits extra attention]
