Markets closed down on Wall Street: Dow -0.96%, S&P -1.17%, Nasdaq -1.26%, Oil +0.24%, Gold -1.32%.
On the commodities front, Oil (NYSE:USO) recovered slightly, up to $91.24 a barrel after yesterday’s $4 drop. Precious metals were down again today with Gold (NYSE:GLD) closing at $1,500.50, a drop of $23 from yesterday, and Silver (NYSE:SLV) is down 2.36% to $34.19.
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Today’s markets were down because:
1) Tech slump. Both Oracle (NASDAQ:ORCL) and Micron Technology (NASDAQ:MU) suffered huge losses in the market today, weighing heavily on tech stocks. The Nasdaq Composite, up 0.66% yesterday is down 1.16% today. Tech was also the worst performer of the 10 sectors on the S&P 500. Blue chips were dragged down as well by the Dow’s tech members like Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTC), and Cisco (NASDAQ:CSCO). All in all it was a terrible day for tech (NYSE:XLK).
2) Italy might be the new Greece. Also Ireland, Portugal, and maybe Spain (NYSE:EWP). Really no one’s being left out of the party. After Moody’s put 12 Italian government-related financial institutions on review for possible downgrade, people are worried that it might be too late to contain Greece’s debt woes — they may have already contaminated other borderline economies. Spanish and Italian bond yields are up, with Spain’s 10-year bond reaching its highest level since 2000. And Italy (NYSE:EWI) has a national debt that totals 120% of GDP, a figure that seems unlikely to improve considering long-term structural weaknesses and low productivity. Greece may only be the first domino to fall.
3) Positive economic data? The latest GDP report came out this morning and the figures were better than previous estimations, showing durable goods rose more than expected in May after suffering a 2.7% decline in April. But the report couldn’t have come out at a worse time, overshadowed by today’s tech losses and renewed fears in Europe, as well as still-low crude futures and plummeting oil-related stocks.
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