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The one-day winning streak comes to an end.First the scoreboard:
Dow: 12,419, -160.8, -1.2%
S&P 500: 1,313, -19.1, -1.4%
NASDAQ: 2,837, -33.6, -1.1%
And now the top stories:
- European markets were an utter mess this morning. Things improved briefly on reports that the European Union would consider using the European Stability Mechanism (the permanent euro bailout fund) to directly recapitalize European banks. However, this optimism vanished when analysts realised that the European Commission—not the more important European Central Bank or EU leaders—was suggesting this plan.
- Meanwhile, Italy had a tough government bond auction this morning, and the debt-laden country saw its 10-year borrowing rate surge north of 6 per cent.
- Also, Spain remains a hot mess. Former Spanish premier Felipe Gonzalez recently wrote, “We’re in a situation of total emergency, the worst crisis we have ever lived through.” 14 Reasons Spain Is Turning Into A Disaster >
- The one major economic data point we got today was April pending home sales, which unexpectedly plunged 5.5 per cent. Economists were looking for the number to be flat. Ian Shepherdson of High Frequency Economics thinks that this might be just noise and that it might be safe to ignore it for now. However, housing bears like Keith Jurow now have more evidence to support their dismal forecasts. The 32 Sexiest, Tastiest, Creepiest And Craziest Economic Indicators In The World >
- Shares of Research In Motion fell 7.8 per cent today. After the U.S. markets closed last night, the BlackBerry maker unexpectedly announced it would be reporting an operating loss in Q1. It also reported that it had hired investment banks JP Morgan Securities and RBC Capital Markets to help it review “strategic business model alternatives.”
- Pep Boys, the auto repair chain, absolutely collapsed today after The Gores Group cancelled its $791 million bid for the company. The stock fell 19.8 per cent.
- Don’t Miss: Jim O’Neill’s Huge Presentation On The Global Economic Outlook And World Financial Markets >