Stocks Plummet as Europe Adds to Recession Fears
Markets closed down on Wall Street today: Dow -1.51%, S&P -1.54%, Nasdaq -1.36%, Oil -1.72%, Gold -1.71%.
On the commodities front, Oil (NYSE:USO) fell to $104.88 a barrel. Precious metals were down, with Gold (NYSE:GLD) falling to $1,674.80 an ounce while Silver (NYSE:SLV) fell 2.33% to settle at $32.91.
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Today’s markets were down because:
1) Europe. Stocks were pressured today by weaker economic data and rising yields on euro-area government bonds. Europe’s economy contracted in the fourth quarter as exports and consumer spending declined and investors pulled out of equities. Gross domestic product in the European Union shrank 0.3 percent. Exports fell 0.4 percent in the last three months of 2011, compared to the previous quarter, when exports grew 1.4 percent. Household spending declined 0.4 percent and investment dropped 0.7 percent.
2) Gas. Investors remained wary of political tensions between Iran and Israel, which have driven oil and gas prices sharply higher over the past month. High prices at the pump are threatening to derail the recovery in the U.S., and without any major domestic economic reporters on Tuesday, Americans looked to concerns abroad, where dismal outlooks caused stocks to move sharply lower. On Friday, the U.S. Labor Department will release the February jobs report, until which point investors are likely to remain on edge.
3) Financials. Financial stocks were some of the hardest hit when markets pulled back today. March hasn’t been a good month for stocks, particularly Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS), both of which are down about 2 percent so far this month. Bank of America fell around 3.5 percent today, while Goldman was down over 4 percent. JPMorgan (NYSE:JPM) fell about 3 percent today, while Citigroup (NYSE:C) was down nearly 5 percent.