STOCKS TANK TO END Q3, MORGAN STANLEY CRUSHED: Here's What You Need To Know

AP Fat Lady

Stocks ended the day, month, and quarter in the red.

But first, here’s the scoreboard:

Dow: -241
S&P 500: -29
Nasdaq: -65

And now the top stories:

  • Futures were already pointing lower before the open, so investors weren’t expecting much. Some have suggested quarter-end window dressing was at play.  But there were clearly bigger issues affecting the markets.
  • Personal income and spending data was mixed. Economists expected income to grow 0.1%, but it actually fell 0.1%.  Even worse, last month’s income growth number was revised down to 0.1% from 0.3%.  However, spending climbed 0.2%, which was in line with expectations.
  • On a more positive note, the August Chicago PMI reading came in at 60.4, ahead of the expectation for 55.0. Consumer sentiment climbed to 59.4 from its last reading of 57.8.
  • However, favourable economic data could not get it out of people’s head that we were on the front end of a recession. ECRI’s Lakshman Achuthan told us the US is “tipping into a new recession” and “it is not reversible.”
  • All of the economically sensitive commodities did poorly today.  Copper continued its decent, falling 3% today. NYMEX crude oil settled at $79.20 a barrel, the lowest level of the year.
  • China continues to freak everyone out.  A source of growth for internationally-exposed US companies, China saw its credit default swaps soar, and Chinese ADRs plunged.
  • Morgan Stanley also saw its CDS spreads spike and shares plunged 10.5% on concerns over its European debt exposure.  Then again, we should be cautious about what CDS actually tells us.
  • It was a relatively quiet day in terms of Europe news.  But the selloff in Morgan Stanley shares reminded us that despite some progress, a resolution to the Eurozone debt crisis is not even close.  And now an Italian newpaper is reporting the troika may require private Greek bond holders to take a 75% write down, which is much higher than the 21% expected.
  • In a sad note, Eastman Kodak, a former Dow stock, has reportedly hired Jones Day for a possible restructuring.  Traders smell a bankruptcy filing.
  • Don’t Miss: 11 Companies That Will Get Crushed When The Government Cuts Back

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.