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U.S Stocks Plummet Amid European Debt Crisis Concerns

Strategic Insights

— 2 min read

U.S stocks opened lower on Monday, defying a two-day gain for the Standard & Poor's 500 Index, as Moody's Investors Services raised concerns over European nations' credit ratings. The European Union's (EU) EU Summit last week failed to yield "decisive policy measures" to mitigate the region's debt crisis, according to Moody's. The EU's efforts to lend up to 200 billion euros to the International Monetary Fund (IMF) to ease access to liquidity for debt-strapped euro zone nations also failed to reassure anxious traders.

Key Takeaways:

  • Moody's Investors Services reviewed the credit ratings of all European nations due to the EU Summit's failure to produce "decisive policy measures" to address the region's debt crisis.
  • The European Union agreed to lend up to 200 billion euros to the IMF to ease access to liquidity for debt-strapped euro zone nations, but this effort failed to calm market anxiety.
  • Intel Corp dropped 4.32 percent after lowering its fourth-quarter revenue forecast for hard disk drive supply storages, pacing declines among Technology shares.
  • Financial shares, led by Morgan Stanley and Citigroup Inc, dropped nearly 4.5 percent and 1.6 percent respectively, following losses in European lenders.
  • Schlumberger Ltd, Newmont Mining Corp, and Freeport-McMoRan & Gold Inc plunged 3.32 percent, 3.20 percent, and 3.27 percent respectively, as commodities declined.
  • Salesforce.com Inc dipped 4.88 percent after being cut to "underperform" from "neutral" at Cowen and Company LLC, while Onyx Pharmaceuticals Inc fell 5.66 percent after being edged with a standard review from U.S regulators for its experimental cancer drug, Carfilzomib.
  • The U.S dollar gained against its peer, reacting to the decline in energy and raw materials shares as the US Dollar Index picked up from 78.75 to 79.27, reaching its highest level at 79.34 and lowest at 78.63.
  • Gold prices dropped heavily to reach $16.68.30 an ounce since the opening level of $1677.31, while Oil traded low from $99.49 to $97.81.

Statistics:

  • The Dow Jones Industrial Average (DJIA) dropped 117.39 points or 0.96 percent at 09:51 New York time reaching 12066.87 levels.
  • The S&P 500 index dropped 14.64 points or 1.17 percent to 1240.55, while the NASDAQ Composite index declined 38.19 points or 1.44% to 2608.66 levels.
  • Intel Corp dropped 4.32 percent, while Morgan Stanley and Citigroup Inc dropped nearly 4.5 percent and 1.6 percent respectively.
  • Schlumberger Ltd, Newmont Mining Corp, and Freeport-McMoRan & Gold Inc plunged 3.32 percent, 3.20 percent, and 3.27 percent respectively.
  • Gold prices dropped by $16.68.30 an ounce to $16,677.31.

Sources:

  • "Moody's Reviews All European Nations' Credit Ratings." ecPulse.com, 2011.
  • "European Union Agrees to Lend Up to 200 Billion Euros to IMF." ecPulse.com, 2011.
  • "Intel Corp Drops 4.32 Percent After Lowering Fourth-Quarter Revenue Forecast." ecPulse.com, 2011.
  • "Morgan Stanley and Citigroup Inc Drop Nearly 4.5 Percent and 1.6 Percent Respectively." ecPulse.com, 2011.
  • "Schlumberger Ltd, Newmont Mining Corp, and Freeport-McMoRan & Gold Inc Plunge 3.32 Percent, 3.20 Percent, and 3.27 Percent Respectively." ecPulse.com, 2011.
  • "Salesforce.com Inc Dips 4.88 Percent After Being Cut to 'Underperform' from 'Neutral' at Cowen and Company LLC." ecPulse.com, 2011.
  • "Onyx Pharmaceuticals Inc Falls 5.66 Percent After Being Edged with a Standard Review from U.S Regulators." ecPulse.com, 2011.

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