Markets closed down on Wall Street today: Dow -0.74%, S&P -0.81%, Nasdaq -0.89%, Oil -1.35%, Gold +1.04%.
On the commodities front, Oil (NYSE:USO) made a reversal, dropping to $95.93, while precious metals continued to gain, with Gold (NYSE:GLD) up to $1,606.70 an ounce and Silver (NYSE:SLV) up 3.49% to $40.44 an ounce.
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Today’s markets were down because:
1) Same old, same old. Lately, whenever stocks are down, it has something to do with the sovereign debt crisis, whether it’s Greece, Italy (NYSE:EWI), Ireland, or the U.S. And today it’s everybody. Lawmakers continue their game of chicken with just two weeks until a deal must be reached, while European leaders still haven’t decided on the role of private investors in a new Greek aid package and Italy’s bond yields continue to skyrocket. And last week’s bank stress tests failed to have much of an impact on fears as analysts are saying that they were too lenient and didn’t accurately test bank preparedness for Greek default.
2) Banks. Nothing pulls down the markets like the nation’s biggest banks (NYSE:KBE). When they’re having a bad day, everyone’s having a bad day, and Bank of America (NYSE:BAC) was leading sector losses, dropping 2.50%. Wells Fargo (NYSE:WFC), Citibank (NYSE:C), Deutsche Bank (NYSE:DB), and Morgan Stanley (NYSE:MS) were all down more than a percent. With all 10 S&P sectors down, financials were by far the worst, helping NYSE decliners outnumber gainers four-to-one. While declines might be explained by general wariness among investors worried about the economy, it might also have something to do with the looming uncertainty surrounding the Dodd-Frank Act and how strictly it will regulate banks and thus hinder profitability.
3) The Murdoch Effect. The non-stop bad press machine that is News Corp. (NASDAQ:NWSA) has seen its shares drop off nearly 18% since news of its phone-hacking scandal broke. The stock has fallen 4.32% just today, and the bad juju seems to be wearing off on other media giants. Comcast (NASDAQ:CMCSA), CBS (NYSE:CBS), Disney (NYSE:DIS) are all well into the red today, and even Time Warner (NYSE:TWX) shares are down, despite having record-breaking box office giant — Harry Potter and the Deathly Hallows 2 — taking in revenue for the media conglomerate.