Investors decided to lower their expectations that something of value will actually come out of this weeks EU Summit, sending all the indexes down on the day. Markets are looking for what is normally dubbed a “game-changer” but are now thinking that Germany simply won’t budge on their position and rather once again kick the can down the road.
Spain officially asked the EU for a bailout of the Spanish banks. A further bailout of Spain (like in the other PIIGS) might also be needed on top of the current loan that was asked for today.
Expect to see further whipsaw volatility like we saw last week with 100 point swings in any direction on any given day. Volume is picking up which is a good sign. Tomorrow we will most likely see another dead cat bounce in the markets like we saw last Friday.
Chinese internet stocks saw a sell off after the countries GDP expectations where lowered by Citigroup (C ). Data center 21Vianet Group Inc (VNET) declined for the first time in nine trading days falling 5.3% on the day.
The DOW (INDU) fell 138 points, the S&P 500 (SPX) fell 21 points, and the Nasdaq (COMP) fell 56 points. All averages loosing more than 1% on the day.
Oil fell 55 cents to close at $79.21 a barrel.
Gold rose $21.50 to close at $1,588.40 an ounce.
The 10-Year Note rose pushing the yield down to 1.62%.