Stocks at Lows, 34 Italian Banks Downgraded
Feb 10, 2012 15:26:20 GMT -5
Post by PrisonerOfHope on Feb 10, 2012 15:26:20 GMT -5
Stocks at Lows, 34 Italian Banks Downgraded
Published: Friday, 10 Feb 2012 | 3:13 PM ET
Text Size
By: JeeYeon Park
Stocks accelerated their losses Friday, on track to logging their worst session this year, after stalled debt negotiations in Greece, some disappointing economic news and reports that S&P downgraded a handful of Italian banks.
In the latest round of disappointment from the euro zone, ratings agency S&P downgraded 34 of 37 Italian banks, including banking giant UniCredit, citing worries over the banking industry and economic risks in the country.
The move comes after the ratings agency's downgrade of Italy's sovereign rating in January to BBB+, along with downgrades of nine other euro zone countries.
All three major averages are on track to posting their worst session this year.
Major U.S. Indexes
.DJIA
12759.98
-130.48
-1.01%
.NCOMP
2897.73
-29.50
-1.01%
0
.SPX
1339.03
-12.92
-0.96%
0
The Dow Jones Industrial Average fell sharply, led by DuPont [DD 51.0805 -0.9795 (-1.88%) ] and Alcoa [AA 10.239 -0.401 (-3.77%) ], after closing at its best level since May 2008.
The S&P 500 and the Nasdaq also slumped. The CBOE Volatility Index, widely considered the best gauge of fear in the market, surged above 20 for the first time this month.
All 10 S&P sectors were firmly in the red, led by materials and energy.
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“You had a 7 percent rally [on the S&P 500] from the beginning of the year and that’s the strongest start since 1987, so you are due for a bit of a consolidation and let investors take a breath,” said Phil Orlando, chief equity market strategist at Federated Investors. “And with the headlines associated with Greece overnight, it’s an appropriate place for investors to take a pause.”
Euro zone finance ministers said the debt-ridden nation will need to make further cuts in order to be granted bailout funds. Meanwhile, Greek workers went on strike, protesting against the austerity measures.
Meanwhile, Greece's Deputy Foreign Minister Marilisa Xenogiannakopoulou, a member of the socialist party, resigned in protest against the tough bailout terms, according to the state television.
Adding to woes, Chinese January trade data fell the most since the depths of the financial crisis, signaling further demand decline.
On the economic front, the trade deficit widened slightly more than expected to $48.8 billion in December, according to the Commerce Department, climbing to the highest level since July 2008. Economists polled by Reuters had expected the trade deficit at $48.0 billion.
And consumer sentiment index fell to 72.5, according to the Thomson Reuters/University of Michigan survey. Economists expected February's preliminary consumer sentiment index to dip to 74.5, according to a Reuters survey.
“It’s difficult to be long this weekend…you’re gambling if you wish to be long going into the weekend,” said Todd Schoenberger, managing director at LandColt Trading. “You have all the chaos in Greece, which doesn’t help matters.”
www.cnbc.com/id/46341006
Published: Friday, 10 Feb 2012 | 3:13 PM ET
Text Size
By: JeeYeon Park
Stocks accelerated their losses Friday, on track to logging their worst session this year, after stalled debt negotiations in Greece, some disappointing economic news and reports that S&P downgraded a handful of Italian banks.
In the latest round of disappointment from the euro zone, ratings agency S&P downgraded 34 of 37 Italian banks, including banking giant UniCredit, citing worries over the banking industry and economic risks in the country.
The move comes after the ratings agency's downgrade of Italy's sovereign rating in January to BBB+, along with downgrades of nine other euro zone countries.
All three major averages are on track to posting their worst session this year.
Major U.S. Indexes
.DJIA
12759.98
-130.48
-1.01%
.NCOMP
2897.73
-29.50
-1.01%
0
.SPX
1339.03
-12.92
-0.96%
0
The Dow Jones Industrial Average fell sharply, led by DuPont [DD 51.0805 -0.9795 (-1.88%) ] and Alcoa [AA 10.239 -0.401 (-3.77%) ], after closing at its best level since May 2008.
The S&P 500 and the Nasdaq also slumped. The CBOE Volatility Index, widely considered the best gauge of fear in the market, surged above 20 for the first time this month.
All 10 S&P sectors were firmly in the red, led by materials and energy.
RELATED LINKS
Top Trader: S&P 500 Still Cheap
What Will Drive Apple to $665
5 Hedge Funds’ Top Stocks Soar
'Halftime' for Stock Rally?
“You had a 7 percent rally [on the S&P 500] from the beginning of the year and that’s the strongest start since 1987, so you are due for a bit of a consolidation and let investors take a breath,” said Phil Orlando, chief equity market strategist at Federated Investors. “And with the headlines associated with Greece overnight, it’s an appropriate place for investors to take a pause.”
Euro zone finance ministers said the debt-ridden nation will need to make further cuts in order to be granted bailout funds. Meanwhile, Greek workers went on strike, protesting against the austerity measures.
Meanwhile, Greece's Deputy Foreign Minister Marilisa Xenogiannakopoulou, a member of the socialist party, resigned in protest against the tough bailout terms, according to the state television.
Adding to woes, Chinese January trade data fell the most since the depths of the financial crisis, signaling further demand decline.
On the economic front, the trade deficit widened slightly more than expected to $48.8 billion in December, according to the Commerce Department, climbing to the highest level since July 2008. Economists polled by Reuters had expected the trade deficit at $48.0 billion.
And consumer sentiment index fell to 72.5, according to the Thomson Reuters/University of Michigan survey. Economists expected February's preliminary consumer sentiment index to dip to 74.5, according to a Reuters survey.
“It’s difficult to be long this weekend…you’re gambling if you wish to be long going into the weekend,” said Todd Schoenberger, managing director at LandColt Trading. “You have all the chaos in Greece, which doesn’t help matters.”
www.cnbc.com/id/46341006
