Stocks Tumble on Eurozone Debt Woes
NEW YORK (TheStreet) - Stocks sank more than 1% Monday as heightened concerns about the eurozone's debt crisis curbed investors' appetite for risk.
The Dow Jones Industrial Average shed 131 points, or 1.1%, to close at 12,381, after trading as low as 12,331 earlier in the session. The S&P 500 fell 16 points, or 1.1%, to close at 1317, and the Nasdaq Composite plunged 44 points, or 1.6%, at 2758.
Fears about the eurozone's sovereign debt crisis were fueled by speculation that Greece may have to restructure its debts, the loss of Spain's Socialist party in regional elections, and the decision by Standard & Poor's to lower its outlook on Italy's debt.The news weakened the euro and strengthened the U.S. dollar, sending oil prices below $98 a barrel. Energy, capital goods and basic materials stocks were Monday's weakest sectors, as investors worried that the global industrial cycle was poised for a slowdown. "There is a bigger story at play here. The problems in Europe have been playing out for over a year now," said James Dailey, chief investment officer at Team Financial Managers. "The trigger for this is a burgeoning slowdown in the global industrials zone, which is why commodities are under pressure." Dailey said the prospect of a slowdown in industrials put the spotlight on Germany, which has till now shown significant strength and has helped mask the problems in the eurozone. "Germany will be disproportionately impacted by a slowdown because it is much more levered to industrials than the United States. Germany's banks are significantly at risk because of their leverage." he said. The FTSE in London lost 1.9%, and the DAX in Frankfurt sunk 2%. On the Dow, all 30 components with the exception of McDonalds (MCD) ended the session in the red, with Caterpillar (CAT), Alcoa (AA) and DuPont (DD) the biggest laggards.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV