U.S. Stocks Retreat as European Debt Crisis Persists

Strategic Insights -

U.S. stocks fell on concerns that the European Union's $1 trillion loan package may not be enough to alleviate the region's debt crisis, leading to skepticism among investors. The Standard & Poor's 500 Index slipped 0.3% to 1,155.79, while the Dow Jones Industrial Average dropped 36.88 points, or 0.3%, to 10,748.26. Investors remained cautious, with the market having "very little room for error," according to Mark Freeman, a money manager at Westwood Management Corp.

Key Takeaways:

  • The S&P 500 Index fell 0.3% to 1,155.79, led by commodity producers such as Occidental Petroleum, Alcoa, and Goldman Sachs, which dropped at least 1.3% due to the decline in oil and copper prices.
  • The Dow Jones Industrial Average dropped 36.88 points, or 0.3%, to 10,748.26, with Alcoa declining 3.7% to $12.13, the largest decline in the Dow average.
  • Newmont Mining Corp., the biggest U.S. gold producer, jumped 4.9% as the precious metal rose to a record on demand for a safe haven.
  • Walt Disney Co. climbed 1.3% before reporting earnings.
  • The market's reaction was fueled by skepticism that the European loan package will halt the region's debt crisis, with the European Central Bank setting up a nearly $1 trillion financial aid package yesterday.
  • Global equity markets have been roiled in the past two weeks by a worsening debt crisis in Europe, with downgrades of Greece, Spain, and Portugal making the region's banks reluctant to lend.

Statistics:

  • The S&P 500 Index slipped 0.3% to 1,155.79.
  • The Dow Jones Industrial Average dropped 36.88 points, or 0.3%, to 10,748.26.
  • Alcoa declined 3.7% to $12.13, the largest decline in the Dow average.
  • Occidental Petroleum fell 1.3% to $83.03.
  • Goldman Sachs, the biggest U.S. securities firm, fell 1.3% to $141.97.
  • Crude oil fell 0.6% in New York amid concern about the global growth outlook and a decline in the value of the euro.

Sources:

  • Euclid Infotech Pvt. Ltd. (Copyright [c])
  • Standard & Poor's
  • Dow Jones Industrial Average
  • Westwood Management Corp.
  • European Central Bank
  • Albawaba.com