Market Recap: The Eve Before the EU Meeting Stocks Fall Hard
Markets closed down on Wall Street today: Dow -1.74%, S&P -2.00%, Nasdaq -2.26%, Oil +1.73%, Gold +3.01%.
Hot Feature: Oil Rises to 12-Week High, Enters Bullish Territory.
Today’s markets were down because:
1) Europe. Fears that European policy makers won’t act to stem the sovereign debt crisis from spreading throughout the region have investors fearful for the future of the global economy. Yesterday, euro-zone leaders decided against restructuring Greek debt, instead hoping to entice bondholders to accept losses to help restore the country’s finances. They also ruled out using European Central Bank funds for the rescue facility, and have yet to settle upon a decisive course of action, which could include IMF involvement or private funding for the European Financial Stability Facility.
2) Consumer confidence. The Conference Board’s consumer sentiment index declined to its lower level since March 2009, when the global economy was in the throes of a full-blown recession. With limited job availability keeping unemployment high, home values continuing to deteriorate, and European nations continually threatening to default on their sovereign debt, consumer sentiment has been taking a beating. Many retailers (NYSE:XRT) are now forecasting weaker holiday shopping seasons than previously expected. At least FedEx (NYSE:FDX) and UPS (NYSE:UPS) expect record shipments.
3) Uh, Netflix. Talk about going from Prom Queen to the brothel … Netflix (NASDAQ:NFLX) is now the most hated stock on Wall Street. Today’s earnings revealed cancelations continue at a strong pace after the shocking price increase strategy. Is it the end of an era? On another tech note, Amazon (NASDAQ:AMZN) just announced after the bell and the stock is down 15%. The ecommerce giant is investing heavily in the future and it shows: Amazon’s profits fell 73%. Ouch.