MARKETS DEMOLISHED: Here's What You Need To Know

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Photo: HUD

The panic is back after taking a 5-day rest.But first, the scoreboard

Dow: -417.66
NASDAQ: -129.24
S&P 500: -53.02

And now, the top stories

  • The story of today is a continuation of a global panic that’s been in place for weeks now. On Monday, stocks completed the third day of the biggest three-day rally since March 2009. Then in the middle of this week, stocks basically did nothing. And now, it’s back to panicking.
  • Mostly it started in Europe once again, though even yesterday evening the weakness began. Some weak after-the-bell tech stock reports helped send the futures drifting lower. Asia was weak, and then European markets went kaboom. A story about the Fed meeting with European banks over funding concerns that appeared last night caused a lot of worry. Other than that there wasn’t even that much news, although the market’s hunger for a solution to the perpetual crisis grows louder by the day. Perhaps the most ominous new fire in Europe is this situation where various countries who will be bailing out Greece are demanding collateral for their loans. It started with Finland, but if everyone does this, it’s going to kill the whole thing.
  • Obviously the broader European markets got demolished, with European banks taking the brunt of the pain.
  • Things were already very ugly in the early going in the US, and then the data really brought the pain. CPI came in hot and initial claims came in somewhat weaker than expected. If Bernanke’s hands weren’t already tied, with respect to more easing, now he’s even more in a corner.
  • Then at 10:00 we got the KO punch from the Philly Fed report. The swing from +3.2 on the survey to -30.7 was epic and markets, which were already down hard, cratered further. Stocks never got off the mat after that.
  • In the middle of the day, the longs tried to mount a charge, spurred on by news that HP was going to dump its hardware business, but although that was true, the rally went nowhere at all. Later in the day, the company confirmed plans kill its hardware biz — while also pre-releasing mediocre earnings — and there proved to be no advice for the stock, which fell 7%.
  • Not surprisingly, given the panic, Treasuries were a gigantic winner. At one point, yield on the 10-year fell below 2%, an area it never has seen before. Gold was a beast today, hitting new highs above $1820/oz.
  • Regarding the beleaguered big cap US banks it looks like this: BAC -5.97%, GS -3.69%, JPM -4.4%, MS -5.11%
  • For more details on that disastrous Philly Fed report, see here >

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