STOCKS SINK, BANKS KILLED, AMERICAN AIRLINES PLUNGES: Here's What You Need To Know

THis is a sinking Kayak

Photo: Big C Harvey

The Q3 selloff spilled into Q4.First, the scoreboard:

Dow: -258 pts, -2.4%
NASDAQ: -80 pts, -3.3%
S&P 500: -32, -2.9%

And now, the top stories:

  • The biggest news over the weekend was probably the most unsurprising news.  Greece announced that they would miss their 2011 and 2012 budget deficit targets. Although, many speculated this would happen, it definitely wasn’t a positive development as the beleaguered country struggles to convince its neighbours to lend it more money.
  • Investors also continued to worry about China.  Some of the biggest names on Wall Street disputed the idea of a Chinese hard landing. But even a soft landing is likely to have major ripples throughout the global economy.
  • On the upside, US economic data was much better than expected.  The August ISM reading came in at 51.6 versus an expectation of 50.5.  Construction spending unexpectedly jumped 1.4%, beating expectations for a decline.
  • Markets applauded the economic data, sending shares into the green temporarily.  But the rally was short-lived.
  • Economically sensitive commodities like copper and oil each fell by 2%.
  • The US banking sector struggled.  Morgan Stanley fell another 8% as investors continued to worry about the bank’s exposure to European banks. Bank of America closed at $5.53 per share on no obvious company-specific news.  The consumer banking giant continued to struggle to get its website back online.  Also, another analyst slashed his Q3 estimates for Goldman Sachs from a profit to a 70 cent per share loss.
  • American Airlines shares took a breathtaking dive as rumours circulated that the company could soon file for bankruptcy.  Shares closed down 33%, plummeted as much as 41%.
  • Automakers reported their September US sales figures though out the day.  The US automakers beat expectations, while the Japanese automakers, which have been struggled with supply chain disruptions, missed their low expectations.
  • Don’t Miss: 15 Stocks That Everyone’s Shorting As The Market Gets Hammered

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