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Subscribe to RSSNEW YORK — Europe's spreading debt woes and slower manufacturing in China pushed stocks sharply lower Wednesday. The Dow Jones industrial average fell about 235 points.
Traders worldwide were spooked by the poor results at an auction of German debt, which drew too few bids to sell all of the 10-year notes being offered. Germany has Europe's strongest economy, and traders have bought its debt as a safe place to store value during turbulent times.
The weak buying suggests that Europe's crisis might be infecting strong nations that are crucial to keeping the euro currency afloat. Germany bears much of the burden of bailing out weaker neighbors such as Greece and Portugal.
Borrowing costs for Italy and Spain rose from levels that already were considered dangerously high. Europe lacks the resources to bail out those countries, which have its third- and fourth-biggest economies.
According to preliminary calculations, the Dow fell 234.64 points, or 2.05 percent, to 11,258.08. The Dow has now given back more than half of its big October rally. It jumped 9.5 percent last month, the biggest gain since 2002.
The Standard & Poor's 500 index fell 26.19 points, or 2.20 percent, to 1,161.85. All 10 industry groups fell sharply, led by energy companies, materials makers and banks. The index is headed for its sixth straight decline, the longest losing streak since August.
The Nasdaq composite index lost 61.20, or 2.43 percent, to 2,460.08.
The dollar rose sharply against the euro as investors moved money into assets considered to be relatively safe. The euro fell below $1.34, from $1.35 late Tuesday.
Fears about Europe also dragged U.S. bank stocks lower. Investors were unnerved by the Federal Reserve's announcement late Tuesday of a fresh round of stress tests of the biggest banks, said Peter Tchir, who runs the hedge fund TF Market Advisors.
The Fed said 31 banks will be tested to see how they would withstand a recession that would push unemployment above 13 percent by early 2013. The jobless rate now stands at about 9 percent.
The announcement undermined weeks of market-boosting talk by Fed officials, Tchir said. The stress tests, apparently related to fears about European exposure, exposed a darker view of the market held by some central bank officials, he said.
"They went ahead and put weakness into the market for the first time" in months, Tchir said. "No one was that afraid, and now all of a sudden, they're saying 'Our own Fed is worried.' That really spooked people."
Bank of America Corp., Citigroup Inc. and Morgan Stanley each lost between 3.5 percent and 4 percent. JPMorgan Chase & Co. declined 2.9 percent.
Asian markets fell earlier after a survey showed that manufacturing appears to be slowing in China. A day earlier, the U.S. government had lowered its estimate of third-quarter economic growth.
Relatively few shares were traded as many U.S. market participants got an early start on Thursday's Thanksgiving holiday. U.S. markets will be closed on Thursday and will have shortened hours on Friday.
In corporate news, Deere & Co. rose 3.6 percent after the company reported net income growth of 46 percent. Deere credited strong sales of farm equipment.
Groupon Inc. plunged 14 percent to $17.22, trading below its initial price of $20 for the first time. The online deals company went public less than three weeks ago.
Companies that make raw materials were hurt by signals of slower growth in China and worries that Europe might fall into recession. Aluminum maker Alcoa Inc. declined 3.9 percent. It switched off with Bank of America as the biggest loser among the Dow's 30 components. United States Steel Corp. dropped 5.8 percent.
Boston Scientific Inc. rose 1.3 percent after the government approved use of a drug-coated stent for patients with clogged arteries. The stent's approval came earlier than analysts expected.
The U.S. government released a mixed batch of economic reports before the market opened. Concerns about developments overseas appeared to overshadow a handful of hopeful signals.
Slightly more people applied for unemployment benefits last week, a sign that layoffs continue. However, the broader trend is positive. The four-week average fell for the eighth time in nine weeks.
Consumer spending grew by the least in four months. Yet incomes rose a bit more than expected. Orders for long-lasting manufactured products fell for a second month and business investment dropped off. But without commercial aircraft orders, a volatile category, orders actually increased.
Discussing whether the European debt crisis is at a turning point or a breaking point, with Michael Woolfolk, BNY Mellon, and CNBC's Steve Liesman.
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The United States is in line to get our country foreclosed upon, just like what’s happening to the European countries.
I think most people have figured out that Wall Street is one of the most corrupt and ethically deprived institutions on our planet. I think most people also know the media is bought and sold just like most politicians. We also know that Wall Street is one of many tools of the elite but not the main tool. What is very clear is that our financial system has an architect and carefully designed plan that is playing itself out in Europe.
The International Monetary Fund (IMF) is very brazen in its fear mongering that we have lost a decade economically. Especially since the IMF has been one of the biggest contributors to perpetuating the instability of the European crisis. The dominoes are beginning to fall in what is an orchestrated attempt by the banksters to consolidate Europe and eventually the rest of the world’s economies under one umbrella that is to be controlled by those that have always controlled currency and money. The most egregious aspect of this contrived extortion is that they are blaming the people who are the backbone of any economy instead of their greedy corrupt political and business leaders.
George Papandreou was pressured to quit because he lapsed into a morally and ethical responsible position by trying to give the people of Greece a say in their economic future through a referendum. This vote would have given the Greek people the choice to stay in the Euro zone and allow their country to be foreclosed upon by the banksters or leave the Euro regain their sovereignty and coin their own currency once again. The IMF bullied the smallest country as a litmus test for what is going to be a much more challenging foreclosure process when it comes to the larger economies. Italy is now in the cross hairs. This dilemma you are watching unfold goes to the core of the rotten apple that is the world’s financial system.
Folks, you are witnessing the death throes of a corrupt financial system where the stock markets and the fractional reserve banking system are at its core. The volatility in the stock markets are a microcosm of the greed, theft and corruption that has perpetrated all aspects of our and other countries economic systems. In the United States, It doesn’t matter who’s in office. Our political system has turned into a two headed one party system with both parties serving their masters, Wall Street and the banksters/Federal Reserve. The stock market is just another ponzi scheme whose intent is to fleece the gullible at the bottom of the pyramid. The stock market is a rogue element of a financial system that is meant to funnel the wealth to the elite/banksters who soicopathically control our financial lives. It is reaching a point where there is nothing to take anymore from the 99% of the world. The banksters would separate you from your rainy day fund if they could gain access to your shoe box or secret compartment in your purse or wallet. The stock market isn’t the main problem; it’s the fractional reserve banking system that has set the foundation for outright theft. We are experiencing the biggest bank and investment robbery in history and the banks and financial institutions are doing the robbing. When you blame one political party or another they have you right where they want you, in fear, divided and distracted to the theft that is going on right in front of your eyes each and every second of the day.
When you have people on Wall Street day trading and speculating making half a million dollars a year in their twenties betting on people being foreclosed on, you need to ask yourself what is the true purpose of our banking system? At the moment it is largely a theft on the American public. MF Global CEO, ex Goldman Sachs CEO Jim Corzine knows this and knows that nobody with his connections have served any time for stealing the investor’s money (1.2 billion at last count). The financial system’s main mission should be to allocate capital to areas of greatest growth in the real world economy. Yet they allow all kinds of broker speculation and financial gimmicks such as the derivative markets which are based on non-realistic side bets which are now in the quadrillions. The derivatives market was illegal for most of the 20th century.
The European banking crisis is a prime example of what is going to happen to all economies associated with stock market fraud and the Federal Reserve banking system. The financial strife in Greece is the model that will befall most countries. Greece is but a symptom of a cancer that has attached itself to the world’s economies. The Federal Reserve (which is neither federal nor a reserve) has been creating money (monopoly money) out of thin air and charging interest on it insuring a debtor economy for anyone who chooses or is forced to get involved with the Federal Reserve and their fractional reserve banking system. That is why this whole European or any countries current debt crisis will never be resolved and will be preyed upon by the stock market vultures. The Federal Reserve System is designed to cause economies to fail.
If someone loans you two dollars to run your economy and expects three back for the loan and interest how are you going to pay the third back? You can’t unless you borrow more dollars which puts you in perpetual debt and in a constant borrowing cycle to pay off the debt. This is designed not accidental.
Here’s the kicker, once the Federal Reserve/banksters have you struggling to pay off your interest, they send in their loan sharks the International Monetary Fund (IMF). The IMF will loan you money to cover your ever burdening interest payments but they attach a provision that if you default, you will have to give them your assets in what they call privatization (foreclosure).
Since the interest is exponential, you will default and the banksters will come in and try to foreclose on your country, like Greece. They are being told to sell off their own country to pay back the people who caused the mess to begin with. This allows the elite to steal your intrinsic valuable assets because they gave you paper (loans/debt) and the interest on the debt that is systematically impossible to pay back. This also allows the parasitic stock speculators to profit from this designed theft. They not only know the outcome of an economy, they can gamble on the economic bubbles at the investor’s expense. This cancer goes all the way down the food chain.
In the United States case, it doesn’t have to be that way. In our constitution, in Article 1, Section 8, it stipulates that we can “coin money” as a nation and avoid the Federal Reserve’s interest (fee charged on loans) black hole.
So don’t be fooled that the Europeans have come to grips with their financial debt, it’s impossible, it’s a virus that has spread around the globe. Hopefully the Greek people will get their referendum so the Peter Principal will kick in for the Federal Reserve. The stock market vultures will continue to contrive “financial instruments” (credit default swaps/credit derivatives) to defraud the people of the world.
Banks, Central banks, World Bank, IMF = Federal Reserve = Debtor economies, Debtor Nations (economic slaves) and carrion for the stock market derivative heist.
Trustverify -- You said it all and extremely well at 3:06 pm and below are posts still going on and on about the democrats and the republicans. They don't listen and they don't learn. They can not see the big picture. I wish I knew why. You have to wonder who these people actually are.
There's not enough public pressure to abolish the Federal Reserve. The WallSt FatCats got too much political connections and money power. They got us over a barrel and have been raping us for years.
Like the Indian (from India)says : when rape is imminent, just lay back and enjoy it.
This whole thing is like the giant wheels of cosmic justice. Our banking system creates a global downturn. The stock market responds by putting their money in Europe. Europe is still reeling from the mess we made, and now the people that caused it in the first place are set to lose their shirts in the market because they caused the downturn.
You can't make this stuff up. I hope every bankster that put their money into Europe ends up asking for handouts from people in occupy encampments.
Fatcats,
I agree that the Fatcats have too much power but at the end they are the ones who will lose everything. The whole system will collapse and that's just matter of time but guess what there are no more holes to crawl in and hide and that includes the Fatcats.
And won't it be a pretty picture when our genius, soon to be "conservative" dominated government wades us into an all-out trade war with China?
I'll take a one-sided trade war, with U.S. jobs back in the U.S. on the side, with a diet Coke, please.
Remember the US is NOT a democracy when you have 2 party system with winner takes all, all you have democratic elected dictator ship.
Unless you get smart, which I doubt, you get viable 3th party, the tie breaker.
As it stands now you all are doomed to fail
US national debt is now equal to 1 year of GDP. That's bad, but not unrecoverable. A decade of peace, prosperity, and fiscal conservatives in office could eliminate it.
Families routinely take extreme measures to tighten budgets when they need to. It's time Congress learned that type of "kitchen table accounting". Elect genuine Republicans to all levels of government.
Neo Cons and religious fanatics ruined the republican party. There can not be decade of peace with Neo Cons, remember weapons of mass destruction?
Im not saying the Democratic party is any better. The freeloaders ruined it.
Elect genuine Republicans to all levels of government.
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Now this is funny. Who are you talking about? george bush jr? Ronnie Ray-Guns? Richard Nixon? Or one of the current crop of rethugli-con clowns?
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Im not saying the Democratic party is any better.
You're right. It's sad that in it's direst time, when America needs leaders, we have the likes of McConnell, Ried, Boner, Pelosi, to name just a few of the 500+ members of Congress, the Executive branch and the Judicial branch. In the end America will fall becuase of our type of government.
NO! it's not about the European problems. It is about the USA Problem. A President and Congress who cannot seem to bring themselves to stop spending like fools.
I agree about spending but tax the Rich! Stop the Bush cuts for the wealthy and stop the wars! This will save 4 trillon from the coming debt!
It is apparent that no ones gives a flying f%%k....Of course not financial ruin who cares....where is the story about Kim Kardazian... Proof..there are 4 posts.....and 300 million about to get the Sandusky.
Elect genuine Republicans to all levels of government.
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Now this is funny. Who are you talking about? george bush jr? Ronnie Ray-Guns? Richard Nixon? Or one of the current crop of rethugli-con clowns?
Yeah, yeah, yeah. Friday the stocks will "soar" on "optimism" created by Christmas shopping.
SSDD.
Exactly! They'll use this as "evidence" that the economy is back on track again as consumer spending is up more than the last 3 years, etc. etc. Woo hoo- love those false hopes they try to fill us with
You have to look long term at the market, not the daily ups and downs.
Hussein has passed a lot of stuff regardless of good or bad or regardless of dems and repubs.
What are the corporate earnings over the last 5 years?
...lack of courage and leadership from president.
Please stop the same reporting. Up down bunch of crap
God bless this country and the process for freedom we have and continue to hold. Freedom is wonderful. And God Bless the President! No harder job for either party! He is stopping the wars and that is wonderful! McCain should thank Obama for stopping the drain on this country. Get the hell out of Afgan and come home to protect our boarders! Don't know why any person would want the job!
The stock market is located on a different planet and has no bearing on normal life.
agree
...unless of course you have a 401K, belong to company/union with retirement funds, or expect to retire at some point in life (before death)...the stock market reflects this Nation's economic health, it is as relevant as life itself....those who disregard this expect the government to solve all problems...but, that will work until all the paper to print money is depleted....and the effort of carting around wheel barrows full of worthless money to purchase day old bread break our backs....
Oh pure B.S., the Stocks drop because of Europe's woes.....Look at the unemployment figures just released for our own Country....MSN is so full of B.S. just no creditablity here anymore...
I guess they must have read my post from last Thursday because this is almost exactly what I said. Everybody follow the Market Wizard! ;-)