Markets closed down on Wall Street: DJI -2.04% SP500 -1.95% Nasdaq -1.89% Gold +0.24% Oil +1.46%.
Japan (NYSE:EWJ) continues to spook the world and Saudi Arabia has an escalating issue with Bahrain. Moody’s (NYSE:MCO) also downgraded Portugal’s credit rating again and PIIGS like Spain (NYSE:EWP) got slammed as austerity is becoming the new normal in Europe.
Today’s markets dropped because:
1) Japan (NYSE:EWJ) is about as scary a situation as possible. Fukushima is the center of the world at this point, and reports on Japan’s wire indicate problems are not contained at the nuclear power plant. General Electric (NYSE:GE) has been dumped on fears of legal liability for the design and construction of the facility at issue, and you better believe the Japanese government will look for a scapegoat (and deep pockets) once the situation stabilizes and the blame game begins. The next BP (NYSE:BP)? Possibly. But there is still hope for a successful rebuild.
2) US producer prices are heating up and housing starts are drastically slowing down. Ironically, the best thing that could happen to the housing market is a slowdown in adding new supply. But don’t tell that to Homebuilders (NYSE:XHB) who got slammed today. And the last thing producers need is higher input costs as the economy remains as fragile as a Hollywood ego at the Oscars. Hey, let’s all focus on the NCAA Men’s Basketball Tournament and everything will seem fine … for a few days.
3) Apple (NASDAQ:AAPL) had its tiara dented. Ready for a complete shocker? The iPad2 is sold out, yet some Excel jockey over at JMP Securities (who??) downgraded Apple. On a more important note, tablet computing rival Motorola (NYSE:MMI) announced the new Xoom WiFi will compete at Apple’s price point and run on Google’s (NASDAQ:GOOG) Honeycomb OS. All this added up to a staggering 4.4% one day drop for Wall Street’s darling.
Now that you’re in the know, good luck using logic or reason to predict tomorrow’s market activity.