Top 3 Reasons Markets were Down After Europe Debt Woes Continue
Markets closed down on Wall Street: DJI -1.05% SP500 -1.19% Nasdaq -1.58% Gold 0.23% Oil -2.67%.
Markets started down and never got off the mat all day. On the commodities front, Oil (NYSE:USO) treaded lower to close at $97.43. Gold (NYSE:GLD) held $1,500 on the debt scares, and Silver (NYSE:SLV) also finished in the green.
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Today’s markets were down because:
1) Europe’s PIIGS are back at the trough. The general market patterns have been for investors to focus on companies or the sovereign debt crisis. When companies are in the spotlight (e.g., earnings season), stocks tend to ignore debt woes. When companies can’t keep the spotlight, the default worry is sovereign debt. Today, Italy (NYSE:EWI) took a credit outlook rating cut from Standard & Poor’s (NYSE:MHP). Investors were back chattering about whether this is the next domino to fall. Don’t Miss: Wall St. Cheat Sheet Assistant Editor Xander Schachtel Explain How the VIX is Reacting to the PIIGS.
2) Asia had its own woes to worry about. The most recent reading of the HSBC (NYSE:HBC) China Manufacturing Purchasing Managers Index, showed a 10-month low in manufacturing activity. The economic news sent Shanghai shares 3% lower and had hedge funds buzzing about a slowdown in China (NYSE:FXI). Also, goliath contract manufacturer Foxconn reported a tragic factory explosion. The news continues to create worry for Apple (NASDAQ:AAPL) investors who have been fretting over supply chain blunders.
3) US States are trying to take currencies into their own hands. States may want the Feds to pick up the tab for unemployment insurance, but they sure don’t want Uncle Sam’s worthless greenback (NYSE:UDN). Utah is ready to join the goldbug craze and accept gold (NYSE:GLD) and silver (NYSE:SLV) as legal tender. If you’re considering whether to join Utah’s movement and invest in gold, first check out Gold: The Major Pros and Cons for Investors.
Bonus: Results are in. Here’s Your Cheat Sheet to this Quarter’s Dow 30 Earnings.
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