Sign in Subscribe
Stock prices

Stocks Plummet as European Markets Deepen Losses

Strategic Insights

— 2 min read

Monday's market session saw a significant drop in the Dow Jones Industrial Average, down 169 points, or 1.5%, at 11,324, bringing its total loss over the past four sessions to 5%. The drop was fueled by a failed German bond auction, which suggested that investors are demanding higher compensation for taking on risk in the eurozone. The government only sold €3.5 billion of the €6 billion in 10-year bonds, indicating a spreading of the eurozone's debt contagion to its safest haven, Germany.

Key Takeaways:

  • The Dow Jones Industrial Average fell 169 points, or 1.5%, at 11,324, its fourth loss in five sessions, with the index losing 5% over that span.
  • All 30 Dow components were in negative territory, with Bank of America (BAC), Alcoa (AA), and Hewlett-Packard (HPQ) leading the losses.
  • The S&P 500 was down 20 points, or 1.7%, at 1168, and the Nasdaq was down 48 points, or 1.9%, at 2473.
  • The European Central Bank's buying of Italian and Spanish bonds provided little relief for the region's government debt market, with ten-year Italian bonds rising 2.3% and nearing the 7% threshold.
  • Manufacturing in China may shrink by the most since March 2009, according to a preliminary purchasing manager's index for November.
  • Asian stocks fell overnight, with Hong Kong's Hang Seng falling 2.1%, following losses in the U.S.
  • U.S. economic data, including a 2,000 rise in weekly jobless claims to 393,000, failed to lift market sentiment.
  • Durable goods orders fell 0.7%, while personal income rose 0.4% in October, slightly better than expected, and consumer sentiment climbed to its highest level in five months.

Statistics:

  • Dow Jones Industrial Average: down 169 points, or 1.5%, at 11,324
  • S&P 500: down 20 points, or 1.7%, at 1168
  • Nasdaq: down 48 points, or 1.9%, at 2473
  • Ten-year Italian bonds: up 2.3%
  • Manufacturing in China may shrink by the most since March 2009
  • Weekly jobless claims: 393,000, up 2,000
  • Durable goods orders: -0.7%
  • Personal income: up 0.4% in October
  • Consumer sentiment: 64.1, slightly lower than the expected 64.5

Sources:

  • TheStreet.com
  • Bloomberg
  • Reuters
  • International Monetary Fund (IMF)
  • University of Michigan's consumer sentiment index
  • Federal Reserve
  • European Central Bank (ECB)
  • Asian stock markets (e.g. Hong Kong's Hang Seng)
  • U.S. Bureau of Labor Statistics (BLS)

Read more