Stocks Lack Lustre Amid Concerns Over European Debt Crisis

Strategic Insights -

As the European debt crisis continues to unfold, stocks in Europe and the U.S. failed to impress investors on Tuesday, with the Dow Jones Industrial Average falling 0.11% and the Standard & Poor's 500 Index declining 0.14%. Despite some gains in the tech sector, led by Intel Corp and Apple Inc., the markets remained subdued, with the Chicago Board Options Exchange Volatility Index, or VIX, falling 5.06% to 27.38. The Stoxx Europe 600 Index, which had soared 7.2% the previous day on the announcement of a 750 billion-euro financial assistance package, dropped 0.5% to 252.93.

Key Takeaways:

  • The Dow Jones Industrial Average fell 0.11% and the Standard & Poor's 500 Index declined 0.14% amid concerns over the European debt crisis.
  • The Chicago Board Options Exchange Volatility Index, or VIX, dropped 5.06% to 27.38, indicating a decrease in market fear.
  • The Stoxx Europe 600 Index declined 0.5% to 252.93, after surging 7.2% on the announcement of a 750 billion-euro financial assistance package.
  • Intel Corp and Apple Inc. led gains in the tech sector, with the Nasdaq Composite advancing 0.28%.
  • The European debt crisis has sparked concerns over the fiscal outlook for the region, with investors reassessing an emergency aid package.
  • The dollar index fell 3.55% to 84.15, while the euro fell 0.8% against the dollar and 1.8% against the yen.
  • U.S. Treasury notes were little changed after the U.S. sold $38 billion in three-year debt, but prepared to sell $40 billion more in 10- and 30-year securities.
  • The 10-year U.S. Treasury yield rose 1 basis point to 3.55%, while the 30-year bond yield rose 2 basis points to 4.43%.
  • The Reuters/Jefferies CRB Index, which tracks 19 raw materials, fell 0.09% to 264.96.
  • Gold and silver prices surged, with gold for June delivery reaching a record high of $1,219.70 an ounce and COMEX traded silver increasing by 3.4% to $19.180 an ounce.

Statistics:

  • Dow Jones Industrial Average: 0.11% decline
  • Standard & Poor's 500 Index: 0.14% decline
  • VIX: 5.06% decrease to 27.38
  • Stoxx Europe 600 Index: 0.5% decline to 252.93
  • Nasdaq Composite: 0.28% gain
  • Dollar index: 3.55% decline to 84.15
  • Euro: 0.8% decline against the dollar, 1.8% decline against the yen
  • U.S. Treasury 10-year yield: 3.55% (1 basis point increase)
  • U.S. Treasury 30-year yield: 4.43% (2 basis points increase)
  • Reuters/Jefferies CRB Index: 0.09% decline to 264.96
  • Gold for June delivery: $1,219.70 an ounce (record high)
  • COMEX traded silver: 3.4% increase to $19.180 an ounce

Sources:

  • "Stocks lack lustre May 12" (Business Wire)
  • Reuters interview with Mike Moran, senior currency strategist at Standard Chartered Bank in New York
  • Reuters interview with Niels Christensen, currency strategist at Nordea in Copenhagen