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Subscribe to RSSU.S. stocks fell Monday after Moody's Investors Service said last week's European fiscal pact will not deter it from reconsidering the credit ratings of all European Union nations.
The Dow Jones industrial average wasl down about 156 points at about 11:00 a.m. EST. The euro weakened against the dollar and the yields on Italian and Spanish government bonds rose as investors became more nervous about holding the debt of those countries. European stock indexes fell broadly.
The Standard & Poor's 500 index fell 19.9 points and the Nasdaq composite index dropped 43 points.
Moody's said that last week's summit of European leaders produced "few new measures" and that Europe's financial crisis remains in a "critical and volatile stage."
The 17 nations that use the shared currency and the region in general remains "prone to further shocks and the cohesion of the euro under continued threat," Moody's said. As a result, the agency said it would still review the creditworthiness of European countries in the first three months of 2012.
The warning from the credit rating agency deflated optimism about last week's pact, which called for tougher fiscal discipline in countries the euro and greater oversight of national budgets by a central authority.
Yields on Italian and Spanish bonds rose back toward dangerously high levels. The yield on the benchmark Italian 10-year bond rose 0.41 percentage point, a large move, to 6.64 percent. Spain's main bond yield rose a quarter point to 5.90 percent. Greece and Portugal were forced to seek bailouts from their creditors when their bond yields approached 7 percent.
U.S. stocks fell broadly, with declines for all 30 stocks in the Dow Jones industrial average and all 10 industry groups in the Standard & Poor's 500 index. The Dow's biggest lower was Intel Inc., which sharply reduced its revenue outlook because of supply chain problems.
European markets were sharply lower, after soaring late last week on optimism about a summit aimed at solving the region's debt crisis.
Moody's noted that last week's pact does not address Europe's root problem: The heavy debt loads of many nations and their rising borrowing costs. Greece, Portugal and Ireland have had to accept bailouts. Italy and Spain are teetering because their debts scare investors, who in turn ratchet up their borrowing costs.
Stocks in Spain and Italy led European markets lower. Spain's IBEX 35 fell 2.6 percent, Italy's FTSE MIB 2.7 percent. Germany's DAX 2.4 percent.
After two weeks of gains for the major averages, can the momentum continue for the week ahead, particularly in light of recent comments by S&P and Moody's? Insight with Bill Stone, PNC Wealth Management and Jim McCaughan, Principal Global Investors.
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Same headline..Different Day.
No, it is every other day....One day the market soars...the next day, stocks tumble...all for the same reason....
When the market is up, they say it is up because of Europe. When the market is down, they say it is down because of Europe. The truth is that the same conditions exist everyday. Depending on the market action, they put the headlines. Good news and bad news exist at all times. News and earnings do not drive the markets. It is the other way around. Markets move first, economy is effected later.
www.tradingstocks.net/html/news_does_not_move_stocks.html
They have no idea what makes the stock market freak out. I think they throw darts to determine the headline.
Let Europe dwindle in it's own crisis and boost stocks for the U.S.
Tuesday: Stocks soar over European optimism
Wednesday: Stock tumble over Euro debt worries
Thursday: Stocks rise over Greece debt agreement
Friday: Stocks fall as Greece agreement derided as too little, too late
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. The Europeans are now replacing their leaders with technocrats/ex Goldman Sachs banksters. These people haven’t been elected by anybody. 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.
Dear lord just forgive everyone's debts already. It all goes away and now the real fun can start because no one needs to be nice to other players (CHINA, GERMANY) anymore and every country can do whats best for them. Its' the only way out.
Supporting the forgivness of debt is one of the current stupidist attitudes that there is. I see that is in the Occupy Wall Street demands. How many companies and individuals suffer when people declare bankruptcy and a court decides that they dont have to pay the money they owe??? If you were a small business could you withstand losing say a $100000 of assets because someone declared bankruptcy???
@JA522495
What is your suggestion then? To continue ad nauseum shotgunning wacky economic proposals that haven't a chance in hell of succeeding? Yeah, there would be some suffering for a time but in the long run everybody would be starting from an equal playing field. In continuing to perpetuate the system of ad hoc approaches to an obviouly failed system, is ludicrous. Better to just pull the plug on the dying patient and rebuild from the start.
chuck...Why should I...and all successful people accept being equal to the people who made little effort? Why should we sacrifice the many yrs of working, saving, sacrifice and doing the right things so that we can be equal to the people who did none of that??? I did not borrow money that I could not pay back.
We simply need sensible rules for everyone and we need for people to quit whining because they did not pay attention to the rules....We also need for the government to get rid of the attitude that they will just give money to those who fail through their own dumb mistakes.
We also need for government to quit growing government and borrowing money that they immediately waste. We need government that helps promote our economy and business in order to grow business that will supply jobs. We need a government that does not attack business and try to kill production....
How does the stock that's affected by Europe keep changing when NOTHING HAS CHANGED??? Come on people, this is why the stock market is stupid...it is not based off what is happening its based off peoples beliefs of what might or might not happen...waist of time. If the EU bank collapse then the stock market should go down...not if nothing has changed yes everyone hears a rumor that the sky is falling so everyone sells.
I couldn't agree more. As I have mentioned in previous related articles, I don't undersatand how companies that gave out AAA ratings to subprime loan based CDOs, which eventually were a root cause of the US and global real estate markets implosion, to have such an impact on the markets. Where's the credibility in their methods of analyzing credit worthiness? In my opinion, they have none. Yet the markets continue to react to their actions and comments.
Socrates....If you have six stock market experts in one room, you are likely to hear ten different opinions on the status of the market.... Many of them will think that every time the market goes down that it is a buying opportunity....and many of them will think that every time the market goes up that they should take a profit(sell). They will have hundreds of reasons to do just the opposite of each other and only the lucky ones are making a profit at this time....and that luck will likely change soon.... They will make more money by getting you to buy and sell...and buy and sell...and buy and sell.. It is often an ego thing to try to impress others that they know what the market is going to do...and that goes double for the small traders...
Relying on the behavior of NYSE players to determine anything of substance is a fool's game. The Emperor has no clothes!
Why can't Moody's just shut it's damn mouth. Completely unnecessary announcement!
Our stocks arn't taking a boost, their falling.
In fact, i'm pretty sure one or more entities within the government and private sector are attempting to force our own stocks to hit as low as they can go, so these entities can buy them up.
I'm pretty sure Wall Street is forcibly destroying stock value, so their account holders can then buy at low low prices.
Why aren't members of Wall Street going to prison for "Speculation" for @!$%# that's not all true in real world politics or economics?
In fact, who in the hell is Moody's and why is the piece of @!$%# calling the shots on credit ratings of world country's?
Debt requires debt service costs. A lot of debt requires a lot of debt service costs. Debt service costs cause higher taxes. A lot of debt service causes a lot of taxes. Taxes reduce discretionary incomes. The greater the taxes, the greater the destruction of discretionary incomes. Discretionary income is the source of demand, so when the government destroys discretionary incomes, they also destroy demand. Demand is the source of employment, so when the government destroys discretionary income, the government destroys jobs.
The government has intentionally created a lot of debt that has and is requiring a lot of debt service costs, which has and is requiring a lot of tax which has and is destroying discretionary incomes which has and is destroying jobs. Therefore, in my mind, the government has intentionally destroyed jobs to keep themselves in power by spending your money to buy your vote (vote for me and I will give you ....), and therefore the government must be fired.
In November of 2012, do not vote for ANY incumbents. Fire Them All. It is that simple. Fire the government that has destroyed the economy and the new government will get the message. Keep the same idiots in Washington and you will most likely lose your country to the banksters.
Very good analysis Glenn, and actually very accurate.
Unless you are talking to someone who believes that the government giving money to the unproductive somehow, magically increases consumer demand without affecting the discretionary income of hte middle and upper classes. In that case you will demand that the deficits actually increase to somehow spark the economy. (don't laugh Paul "I've never seen a deficit that is big enough" Krugman has been demanding increased spending to revive the economy for the past 2 years.)
Sadly, we won't see a mass "firing" of government. Too many people, including a majority of those who post at the political pages for MSNBC don't yet understand that the very gravy train they keep voting to preserve is the reason for hte economic collapse.
FINALLY SOMEBODY ELSE GETS IT!
Thank you Glenn. Now if we can just wake up the rest of these lemmings before they jump off the cliff we may actually have a chance at saving ourselves.
Looks like Wall Street's get rich quick scheme is falling on its face.
Wow I'm surprised Moody doesn't rate them all AAA.
The US Stock Market is manipulated by traders who make money whether it goes up and down,, so it does both.
Anyone who doesn't understand that Greece, Italy and other Euro countries are bankrupt and going down is a fool.
This is the final outcome of Socialism ,, when all the money is gone,, there is nothing left.
This is the direction Obama has America headed,,, once the Euro plunges --- we have the largest DEBT in the world history,, unless our economy takes off unexpectedly ,,, the party is over for most Americans,, already most Americans are losing big time on their largest investment,, their home... and isn't it odd that oil prices appear to be remaining strong, over in flated, artificially high ,, despite a world wide slump ?
If there was 2 decisive strategies for the USA, they would be :
1. Cut the size of the Federal Government by at least 25 %,,, the Government screws up every time they attempt to control our economy,, Obama is totally clueless when he defers the Keystone Pipeline that even the State Department okayed.
2. Unplug the EPA and the Democrats and create energy ( gas, oil, coal, wind, solar, etc. ) doesn't matter which it is because we use them all,,, ENERGY is the key to our future,, but Obama prefers buying it from our enemies,, we could eliminate our Trade Deficit in less than 2 years and be a net seller of energy to China .
But it appears that is too simple,,, anyone who wants to raise taxes so the US Gov. can waste more money buying votes and taking care of special interest groups,,, has a Death Wish,, and I am pretty certain that Democrats will make your wishes come true very shortly !
Hello Alan W, it sounds like you are a free market capitalist and if left unabated the invisible hand of the market would right the ship. If that was correct the failed banks should have been free to go bankrupt instead of you and I paying for their mistakes. Our current system privatizes profits and socializes losses. You claim it's socialism that has caused all of our ills. I would submit to you that the largest recipients of social welfare in the history of the world have been to the American banks and financial institutions. Remember Tarp and the bailouts, they have been in the tens of trillions. In terms of Democrat and Republican they have both been bought and paid for and both serve their masters, Wall Street and the banksters/Federal Reserve. Wall Street is Washington and Washington is Wall Street.
When you blame one political party or the other, they have you right where they want you, in fear, divided and distracted to the theft that is goin on right in front of your eyes every second of the day. It's not a choice of party affiliation, it's who's side are you on, the greedy or humanities?
Stocks down because of European worries... Stocks up because of European optimism. It's one or the other every day of the week. What a bunch of knee jerk reactionaries.
Not so much reactionaries as some rather astute top level traders who have figured out how to cause mini-stampedes every day. Traders like George Soros are behind the swings. They get in at the start of each swing and then use their media influence to start a stampede. They then jump out at the peak much richer and get back in with reversed positions.
Think of the movie "Trading Places" and how the 2 main characters learn about the orange juice crop report, but then have a false one sent to the men who tried to ruin them. They get the two men to start a run of buying and then sell into the run, then when the real report comes out and everyone is desperate to sell they sell back into the panic, making a fortune while they do it.
Today's traders are a bit more sophisticated because they can use computers, but they also take advantage of many traders who set up automatic trades. Once you know the plans of others, you can ruin them and make yourself rich.
Well, if people are truly capable of that then, it's time for the average guy to get out of the market all together.
It is not at all obvious or logical to see this as cause and effect. The investors on wall street never expected a solution from the EU. The reason stocks moved today is that the payroll tax was not extended and unemployment was not extended and that means the US economy is going to suck.
There are THREE things that ruined this country: Out sourcing our jobs, Wall street and the idiots running this country in washington