Market Recap: Rally Sours as Greek Deal Falls Apart
Markets closed down on Wall Street today: Dow -0.69%, S&P -0.69%, Nasdaq -0.80%, Oil -0.83%, Gold -1.13%.
On the commodities front, Oil (NYSE:USO) fell to $99.01 a barrel. Precious metals were also down, with Gold (NYSE:GLD) falling to $1,721.50 an ounce while Silver (NYSE:SLV) fell 1.30% to settle at $33.48.
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Today’s markets were down because:
1) Greece. The Greek deal isn’t done. Though Prime Minister Lucas Papademos’ coalition has taken some important steps this week, they have by no means reached the finish line. Today markets soured as euro-zone finance ministers called the new Greek austerity deal into question, saying it simply wasn’t enough. Now it’s back to the drawing board for Parliament, which must somehow find another 325 million euros to cut from the federal budget, among other things, if it is to secure another bailout, the only thing standing between Greece and default.
2) Consumers. Consumer sentiment dropped sharply and unexpectedly in February, according this month’s edition of the Thomson Reuters/University of Michigan Consumer Sentiment Index, which declined to 72.5 from 75 last month. Only 23 percent of all consumers surveyed in early February reported an improving financial situation, down from 29 percent in January, as one in four families reported declines in income, despite an improving job market.
3) Companies. Alcatel-Lucent (NYSE:ALU) and LinkedIn (NYSE:LNKD) shares jumped after the two companies announced better-than-expected earnings, the latter reporting a 30 percent jump in profit during the fourth quarter. Barclays (NYSE:BCS) tacked on about 1 percent despite posting an unexpected loss for the fourth quarter, as it also announced that it would cut its bonus pool by 25 percent. Activision Blizzard (NASDAQ:ATVI), Nuance Communications (NASDAQ:NUAN), and First Solar (NASDAQ:FSLR) were all trading lower, with one earnings beat, one earnings miss, and one delay of funding for a massive solar farm planned for the Los Angeles area.