Market Recap: Stocks Sharply Lower on Doubt Over Europe’s Crisis Plan
Markets closed down on Wall Street today: Dow -1.34%, S&P -1.49%, Nasdaq -1.31%, Oil -1.28%, Gold -2.78%.
On the commodities front, Oil (NYSE:USO) fell to $98.14 a barrel. Precious metals were also down, with Gold (NYSE:GLD) falling to $1,669.10 an ounce while Silver (NYSE:SLV) fell 2.77% to settle at $31.36.
Hot Feature: Greece Hopes for Debt Swap Deal by End of January
Today’s markets were down because:
1) Europe. While news on Friday that European leaders had reached deal for a new intergovernmental treaty to create fiscal unity and resolve the long-running debt crisis fueled a market rally, the euphoria has died down as leaders of the countries involved in the deal head home where they will have to convince their politicians to pass measures that will involve forfeiting a significant amount of fiscal sovereignty. Moody’s added to the fray when it it warned of a downgrade risk for European nations, echoing a move by Standard & Poor’s last week.
2) Banks. Financial stocks were again in focus as the biggest reactors to European debt concerns. Shares of Citigroup (NYSE:C), Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), and JPMorgan (NYSE:JPM) were all down between 3 and 7 percent on Monday.
3) Intel. A worldwide hard drive shortage caused by massive floods in Thailand had Intel warning that it will badly miss its sales forecast for the current quarter. Shares of Intel dropped more than 4 percent on the news, making the chipmaker one of the Dow’s worst-performing stocks today.