Wall Street gives thumbs down to euro summit (Stocks drop sharply)

National Business Review ^ | December 13, 2011 | Nevil Gibson

[Qbert]

Stocks on Wall Street have dropped sharply as credit ratings firms gave the thumbs down to last week's European summit.

A profit warning from Intel also weighed on blue chip stocks. It plunged 5.4% after warning that fourth-quarter revenue would fall about $US1 billion short of its previous guidance.

Financial stocks were the weakest sector in the S&P 500 while Bank of America and JP Morgan Chase were two of the Dow's biggest decliners, shedding 5.1% and 4.1%, respectively.

Fitch Ratings said the summit did “little to ease pressure" on the sovereign-debt crisis and that a comprehensive solution was “not on offer." It also predicted a "significant" economic downturn in Europe in the short term.

Earlier, Moody's Investors Service said it would review European countries' sovereign ratings.

The Dow Jones Industrial Average is off by 229 points, or 1.9%, to 11,955 mid-session, while the S&P 500 index is down 2.1%, to 1229.

The technology-oriented Nasdaq Composite is down 1.9%, to 2597.

Other markets: Europe down Major European stock indexes finished sharply lower. The Stoxx Europe 600 lost 1.9% while Germany's DAX tumbled 3.4% and France's CAC 40 shed 2.6%.

Asian bourses ended mixed, with Japan's Nikkei Stock Average rising 1.4% but China's Shanghai Composite losing 1%.

In commodities, crude-oil futures lost 1.6% to $US97.77 a barrel and gold futures slumped 3.1% to $US1,664.20 an ounce.

The euro is sharply lower versus the US dollar, losing 1.3% to $US1.3192. The dollar also strengthened versus the yen.  

[Qbert]

Currently down 220.

[Nip]

Remember, when talking about the European debt you doing just that - talking.

The world markets will remain very shaky until there is a signed agreement on the European debt. And, somewhere in that agreement will have to be enforceable penalties. Otherwise it isn't worth the paper it is printed on.

Does anyone want to take the bet that there will be no enforceable penalties in the agreement?

When that happens you must be in a position to eject from the markets because the probability of them cratering will become a certainty. And when that happens we will follow them down because Europe is “too big to fail”.

[Opinionated Blowhard]

I think even Wall Street is realizing that the game is finally over. There is no more money to prop up lazy people who want a handout for doing nothing merely because they exist. One more bailout isn’t going to help. That’s like giving a heroin addict a couple hundred bucks for one more drug binge. The addict has to be forced to stop by any means. The Euro Summit is just a bunch of junkies looking for a way to keep the high going a little longer. It does not address any of the structural issues that got them where they are.

[GonzoGOP]

I think even Wall Street is realizing that the game is finally over

The game won't be over until we test the lows from October 3. That is still more than a thousand points away. People forget how much the market has climbed in the last two months. It is going to take several days of sustained selling before a real capitulation takes place in the market.

[Varsity Flight]

****One more bailout isn’t going to help. ****

Contraction, people will keep cutting back. The market tracks oil....”One more round, we keep shutting down.” .

The false market is propped by government pension-retirement money, funneled right through the fund managers.

They’re going to keep forcing it through, at the cost of unemployment rising and sustained prices. If prices rise, they’ll kick in salary hikes, declaring inflation.

This plan is all to prepare for PhonyCare, when they intend to fine the living hades right out of everyone else. If PhonyCare is delcared unconstitutional (which it is), watch U.S. Treasury yields rocket in panic.