Top 3 Reasons Markets Were Down on Sovereign Debt Woes
Markets closed down on Wall Street today: Dow -0.47%, S&P -0.44%, Nasdaq -0.74%, Oil +1.70%, Gold +1.28%.
Today’s markets were down because:
1) The Fed. Might as well start with the good news. The markets actually experienced a bounce today after minutes from the Fed’s June meeting showed they might be considering another economic stimulus if unemployment figures don’t improve. Unfortunately the rest of the day included mostly bad news for investors, including increasing oil prices, but without that bounce, today’s markets could have been worse.
2) Tech. Microchip Technology (NASDAQ:MCHP) and Novellus (NASDAQ:NVLS) shares both showed double-digit losses today, bringing down the sector. The Technology ETF (NYSE:XLK) is down 0.88% today on poor earnings reports for chip and semiconductor stocks.
3) Sovereign debt crisis spreading like a Greece fire. Terrible pun aside, Greece’s debt crisis continues to contaminate other Euro-Zone countries. Today, Portuguese and Italian bonds reached some record high yields. Ireland and Portugal have been in trouble for some time, and have already received similar aid packages to that of Greece, but Italy (NYSE:EWI) and Spain (NYSE:EWP) are increasingly in danger, and both have significantly larger economies that will increase the scale of their debt problems and are likely to put even more European countries at risk. Not helping matters was Moody’s (NYSE:MCO) downgrade of Irish bank debt to junk. I wonder where we’d be now if ratings services stopped making things worse?