STOCKS GET SLAMMED, EUROPE GETS WORSE, BANKS AND GOLD GET CRUSHED: Here's What You Need To Know

sumo slam

The U.S. deficit super-committee is expected fail.  But is anyone really surprised?

First, the scoreboard:

Dow: -248.9 pts, -2.1%
S&P 500: -22.7 pts, -1.9%
NASDAQ: -49.4 pts, -1.9%

And now, the top stories:

  • So, the U.S. super-committee is expected to announce that it failed to agree on a deal to reduce the federal budget deficit by $1.2 trillion.  Failure will trigger $1.2 trillion worth of automatic spending cuts starting in 2013.  The healthcare and defence sectors will be hit hardest.  The Super-Committee Failing Is A Major Problem For These 15 Companies >
  • Europe’s debt crisis is also no closer to being resolved. Moody’s warned that France’s weak economic outlook and elevated borrowing costs could eventually lead to the loss of the country’s AAA rating. Borrowing costs in Europe’s debt-laden countries spiked and European stock markets plummeted.
  • Experts continue to offer solutions to the eurozone crisis.  There are new arguments for and against ECB money printing.  Ed Yardeni and David Zervos have even suggested ways for the Federal Reserve to get involved.
  • U.S. economic data continues to come in better than expected.  October annualized existing home sales unexpectedly climbed 1.4% month-over-month to 4.97 million.  Analysts were expecting a decline to 4.8 million.
  • Despite the positive economic data, markets were overwhelmed by uncertainty out of both Europe and the U.S.  Investors flocked to the safe havens like U.S. Treasury securities.  The 10-year note is at 1.96% and the 30-year bond is at 2.95%.  Gold, which some argue to be a safe haven, wasn’t safe at all today.  Gold futures fell $46.50/oz, or 2.7%, to $1,678.60/oz.
  • Gilead Sciences announced that it would buy Pharmmaset, a maker of hepatitis treatments, for $11 billion.  Shares of Gilead fell 9%, as Pharmmaset shares jumped 85%.
  • Jefferies Group came out with yet another statement to further downplay its exposure to Europe.  The stock actually closed up 0.5%.  Other financials did not perform as well.  Bank of America and Citigroup each fell by 5%.  Morgan Stanley fell 4%.
  • Muddy Waters, the research firm that brought wreaked havoc on Sino-Forest shares, made headlines again putting a strong sell rating on Chinese company Focus Media.  The firm accused it of “significant overstatement of the number of screens in its LCDnetwork” and “Olympus-style acquisition overpayments.”  Focus Media fell 39.5%.  Several other Chinese companies, including YouKu.com and SINA Corp. got crushed today.
  • Don’t Miss: These 5 People You’ve Never Heard Of Really Control The Fate Of Europe

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