UFC Fight Chuck Lidell

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Everything sold off again as Greece threatened to wreck Europe and ultimately the whole world.First, the scoreboard:

Dow: -297.1 pts, -2.5%
S&P 500: -35.0 pts, -2.8%
NASDAQ: -77.5 pts, -2.9%

And now, the top stories:

  • Global markets went into panic mode overnight as they digested news out of Greece.  Prime Minister Papandreou said Greece would hold a referendum on the EU bailout due to the harsh austerity measures.  Basically, the referendum threatened to unwind all of the progress made to resolve the eurozone debt crisis. Fitch chimed in early this morning to say that the referendum increased the risk of a “disorderly sovereign default.”  European markets closed near their lows.  European banks plummeted.
  • News about the referendum actually broke during yesterday’s U.S. trading session.  Also, we have reason to believe that a referendum is unlikely to actually happen.  However, U.S. markets sold off anyways in today’s trading session.  As expected, U.S. banks also took a beating.  Morgan Stanley and Citigroup both fell 8%.  Jefferies plummeted 9%.  It didn’t help that MF Global went down because of bad bets on Europe.
  • Speaking of MF Global, the failed futures brokerage finally admitted that it used client assets to make proprietary trades.  This came after $600 million of client money reportedly went missing.
  • Commodities sold off across the board.  Crude oil fell and brought energy stocks down with it.  Baker Hughes led the way lower, falling 8%.  The company also reported disappointing earnings this morning. Other big losers in the energy sector included Halliburton, which fell 6%.
  • The global risk off trade was most obvious in the dollar and U.S. Treasuries, which soared.  The 10-year yield fell below 2% and the 30-year bond fell below 3%.
  • Two economic indicators came in a little light this morning.  The ISM manufacturing index missed at 50.8.  Analysts expected 52.0.  September construction spending inched up 0.2%, which was just shy of the estimate of 0.3%.
  • October auto sales have been rolling out all day.  The Detroit 3 (GM, Ford, and Chrysler) all grew, but all fell short of expectations. GM shares dove 10%.  Ford shed 5%.
  • Late in the trading session, a spokesperson for the Greek government reiterated that the referendum was still on.  This only caused stocks to fall further and close near their lows.
  • Don’t Miss: Here’s Who’s Freaking Out Now That Greece Will Hard Default

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