MARKETS CRUSHED: Here's What You Need To Know

Once again, fears emanating out of Europe (and China) swamped US markets, which got hammered for the 5th time in 6 days. Ominously, after some modest mid-day nibbling, stocks closed very near the lows of the day

But first, the scoreboard:

Dow: -376 (-3.6%)
NASDAQ: -93 (-4.1%)
S&P 500: -43 (-3.9%)

And now for some key stories:

  • Europe continues to confirm that there is nobody in charge. There was talk of some kind of unified anti-shorting regulation across the continent, but for the most part it seems leaders are angry with Germany over its unilateral attack on shorts — the move that precipitated this crisis of confidence.
  • The TED spread widened today, indicating lack of confidence in bank health. Here are the 25 financial institutions most likely to default >
  • In addition to hemorrhaging equity markets, the big loser today was oil, which at one point experienced its own mini “flash crash,” as buyers stepped away, prompting oil to drop below $65. It’s now closer to $68.
  • Beyond oil, pretty much all commodities got slammed, both on the economic fears, as well as fears of some kind of supertax contagion, as first reported by the Sydney Morning Herald last night.
  • Surprisingly, the euro absolutely surged today, presumably on a combination of short-covering and intervention from various central banks.
  • Nouriel Roubini is calling for a 20% correction.
  • Financial reform cleared a key hurdle in the Senate. Its ultimate passage is now a done deal, though there are many questions left, such as the nature of the Volcker Rule (splitting off prop trading from banking) and the derivatives regulations are up in the air. Despite the successful cloture vote, nobody really knows what’s happening
  • The market is waiting for the next move out of Europe or possibly the G20. But what is it?
  • Also, the gulf oil leak is now in the current loop, which means it’s heading straight for Florida.

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