Dow Rebounds From Record 998-Point Drop
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  1. #1

    Exclamation Dow Rebounds From Record 998-Point Drop

    Perhaps the sheeple are beginning to see the hope and change was really smoke and mirrors.


    Dow Rebounds From Record 998-Point Drop


    By Matt Egan
    FOXBusiness


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    Fears that Europe's sovereign debt crisis will spiral out of control sparked a panic on Wall Street as the markets posted their steepest losses in more than a year and the Dow suffered its worst-ever intraday loss of 998 points, a selloff that may have been exacerbated by human error on trading desks.

    Today’s Markets

    The Dow Jones Industrial Average fell 347.80 points, or 3.20%, to 10520.32, the Standard & Poor's 500 dropped 37.75 points, or 3.24%, to 1128.15 and the Nasdaq Composite lost 82.65 points, or 3.44%, to 2319.64. The FOX 50 sank 28.40 points, or 3.33%, to 823.99.

    The massive selloff gained momentum as television images of protests outside Greece's parliament triggered big fears that Europe won't have the political will to get its debt crisis under control.

    “The tone and tenor of the global debt crisis has taken over the market. Everything else has taken a back seat,” said Peter Kenny, managing director at Knight Capital Partners. "This is a currency crisis that has the potential to blow up into a global financial crisis. The only thing that’s going to turn this thing around is action.”

    However, the Dow tumbled almost 1,000 points at one point and sources on trading desks told FOX Business that a bad trade in shares of Procter & Gamble (PG: 60.76, -1.39, -2.24%) may have been responsible for the last portion of the selling. Wall Street roared off its lows, regaining roughly 70% of the losses, despite a lack of any new developments. The unusual trading activity is being investigated by the Nasdaq and the New York Stock Exchange.

    “Calmer heads prevailed. The U.S. is in a much better place than the rest of the world,” said Brian Belski, chief investment strategist at Oppenheimer. “This is what capitulation feels like.”

    Regardless, the Dow still posted its steepest percentage drop since April 2009 on growing fears that Greece's debt crisis will spread to other high-debt European nations like Portugal and Spain. Underscoring the volatility on Wall Street, the VIX, or so-called fear gauge, soared 50% to fresh 52-week highs.

    “The market went into a panic. No one made markets. You had all the machines trying to [sell] things into an abyss,” said Peter Boockvar, equity strategist at Miller Tabak.

    At their lows, the blue chips were on track for their point decline in history, exceeding the 777-point drop in 2008 when the House of Representatives voted down the TARP bailout resolution.

    In addition to global worries that have weighed on U.S. markets, stocks were hurt by weaker-than-expected same-store sales reports from a number of retailers, including Target (TGT: 54.92, -1.17, -2.09%), Gap (GPS: 22.88, -1.77, -7.18%) and Aeropostale (ARO: 27.67, -1.96, -6.61%).

    Almost all 30 blue-chip stocks headed south, led by Caterpillar (CAT: 63.49, -2.48, -3.76%), Bank of America (BAC: 16.27, -1.26, -7.19%) and Hewlett-Packard (HPQ: 48.37, -2.55, -5.01%). The index's best performers were McDonald's (MCD: 69.3, -1.34, -1.9%) and Procter & Gamble (PG: 60.76, -1.39, -2.24%).

    It's unclear how much of the selloff can be chalked up to the massive selloff in shares of Procter & Gamble (PG: 60.76, -1.39, -2.24%), which was down as much as 33% at one point, representing a loss of about $60 billion of its total value. The company said it isn’t clear on what caused the sudden dive and the New York Stock Exchange said it is investigating. A drop of that size would immediately drive about 150 points from the Dow and in turn trigger program trading for sell orders.

    Wall Street's global jitters grew on Thursday as traders were glued to television images of the protests outside the Greek parliament, which signed off on new austerity measures that clear the path for a $141 billion European Union/International Monetary Fund rescue. The protests underscore worries in the markets that Greece and other European nations will fail to have the political will to go through with the painful budget cuts amid civil unrest. Three protesters died on Wednesday during the growing violence.

    U.S. markets were already reeling before the protests as the euro continued its steep decent. European Central Bank President Jean-Claude Trichet said the bank hasn’t talked about buying government bonds, a move some have suggested could stop the crisis.

    Moody's warned on Thursday that severe contagion to the financial systems in southern Europe could "become a common theme." The markets have expressed fear that the Greek bailout won't be able to prevent the crisis from spreading to larger euro zone members that would require much larger rescues. Credit default spreads, which measure the cost to insure debt, spread on Spain, Portugal and Greece, underscoring continued fear.

    The euro plunged as cash fled to the relative safety of the U.S. dollar. The stronger greenback sparked a wave of selling in commodities and multinationals. Crude tumbled to a fresh 11-week low, losing $2.86 a barrel, or 3.58%, to $7 down as much as $22.79 at one point. The company said it isn’t clear on what caused the sudden dive and the New York Stock Exchange said it is investigating.

    Wall Street was also hurt by weak sales reports from a number of retailers, raising concern about consumers’ ability to continue to withstand high unemployment. Surprisingly strong consumer spending, which accounts for 70% of the U.S. economy, has helped propel the markets and the economy.

    According to Thomson Reuters, April retail sales were up just 0.5% from a year ago, missing forecasts from analysts for a 1.7% rise. In fact, almost 70% of retailers reporting results missed expectations.

    Target, the most closely-watched retailer to report monthly results, said its same-store sales slumped 5.9% last month, driving its stock sharply lower. The discounter had been expected to post a drop of just 2.3% in sales. Apparel retailer Gap reported a 3% drop in April same-store sales, compared to expectations for a 1.3% rise.

    Friday’s jobs report, which tends to be one of the most influential reports of the month, was completely overshadowed by the global jitters. Economists expect the Labor Department will say the U.S. created 185,000 jobs last month and the unemployment rate stayed steady.

    Ahead of that report, the government said Thursday the number of people who filed for unemployment insurance fell last week by 7,000 to 444,000, nearly matching the Street’s view. Continuing claims, which are filed by those on unemployment insurance for more than a week, fell by 59,000 claims.

    Corporate Movers

    Cablevision's (CVC: 24.99, -1.82, -6.79%) net income soared on an influx of new subscribers but its EPS of 24 cents was well shy of the Street's view of 33 cents. The cable giant's revenue rose 5.2% to $1.75 billion, ahead of consensus calls for $1.73 billion.

    JC Penney (JCP: 28.11, -0.55, -1.92%) reported a 3.3% decrease in April same-store sales, missing estimates for a more mild drop of 0.8%. The department store operator blamed the drop-off on a shift of the Easter shopping season.

    Cigna's (CI: 32.94, 0.94, 2.94%) first-quarter profits rose 36% and the health insurer's non-GAAP EPS of $1.01 easily beat the Street. Revenue rose to $5.2 billion, compared to expectations for $4.8 billion. Cigna also reaffirmed its full-year earnings guidance.

    Global Markets

    The U.K.'s FTSE 100 fell 1.52% to 5260.99, France's CAC 40 dropped 2.20% to 3556.11 and Germany's DAX slid 0.84% to 5908.26.

    In Asia, Japan's Nikkei 225 dropped 3.27% to 10695.69 after being closed for several days because of a holiday while Hong Kong's Hang Seng sank 0.96% to 20133.41. China's Shanghai Composite plunged 4.11% to 2739.70.
    By faith Noah,being warned of God of things not seen as yet, moved with fear,prepared an ark to the saving of his house;by the which he condemned the world,and became heir of the righteousness which is by faith Heb.11:7

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  3. #2
    Join Date
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    I'll bet that the Toilet Paper industry stocks went through the roof for a short period!
    The Most Important Thing That You Can Do In This Life, Is To Determine "WHERE" You Will "LIVE" In The Next Life.

  4. #3
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    Well ya know what they say, in reference to the Euro, don't put all your eggs in one basket. Guess the basket's falling....

  5. #4
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    Quote Originally Posted by Ringo View Post
    I'll bet that the Toilet Paper industry stocks went through the roof for a short period!
    Lol, good one.

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