D&D Note (7-23-2012) ~ Spanish Fears Drag Down Markets

D&D Note (7-23-2012)

Call it the slowest train wreck in history. Investors have been worried about Spanish sovereign debt and adjusting their portfolios now for over three years. Today we had yet another cold call to reality that Spain most likely will need a full out bailout of banks and regions. The yields on the Spanish 10-Year Debt is now up to a record Euro-Area high of 7.565%. With bonds at that level it screams for a bailout. Both Spain and Italy have put into effect a temporary short-selling ban.

After European markets closed traders in America re-focused their attention to domestic corporate earnings. McDonald’s (MCD) shares fell after the food chain missed earnings and revenue expectations due to the global economic slowdown.

Despite McDonald’s and Spain the markets managed to rally into the day off the lows but still closed down on the day.

DOW 1-Day Chart

The DOW (INDU) fell 101 points at 0.8%. The Nasdaq (COMP) lost 35 points at 1.2%. And the S&P 500 (SPX) fell 12 points at 0.9% closing at a key psychological level of 1,350.52.

Corporate Network company Cisco (CSCO) announced today they will be cutting 2% of their global workforce or 1,300 jobs. This move was a “continuous process of simplifying the company, as well as assessing the economic environment.” Last year in June the silicon valley company laid off 9% of its workers and transferred another 7% to another company through a sale. Shares of the company fell 1.4% in after hours trading.

Baidu (BIDU) was up 5.79% in After Hours at $113.30 a share after reporting better-than-expected earnings. The company also reported than larger companies like P&G are ramping up their ad dollars spent as well as many smaller companies.

Natural gas and oil giant Halliburton (HAL) saw shares gain after the company reported better-than-expected earnings with strong drilling activity within international markets help to off set slower growth in North America.

This week will also see earnings from UPS (UPS), AT&T (T), Ford (F), Apple (AAPL), Amazon (AMZN), and Facebook (FB) will release their first ever quarterly earnings.

Oil fell 14 cents to close at $88 a barrel.

Gold fell $1.60 to close at $1,575.80 an ounce.

The 10-Year Note was down 0.02 putting yields at 1.44%.