Whatever positivity was gained by Tuesday's resignation announcement of
Italian Prime Minister Silvio Berlusconi was thrown right out the window
Wednesday. U.S. and European markets alike were sent reeling Wednesday as
Berlusconi's insistence on elections, rather than an interim government,
threatened national economic reform, sending the yield on the Italian 10-year
bond past the 7% point a mark that prompted similar worries for Greece, Ireland
and Portugal. Later in the afternoon, after American indices began to flatten
out, EU officials announced that a bailout of Italy wasn't forthcoming. The
Dow Jones finished down 389.24 points, or about 3.2%, and the S&P tumbled about
46.82 points, or nearly 3.7%. The European Central Bank began buying up scores
of Italian bonds to soften the situation, but Italy's lack of a debt solution
had traders selling furiously through the day's end. The euro zone's
continued free fall into economic chaos had German Chancellor Angela Merkel
calling for deep reforms throughout Europe. The fallout in stocks was
significant. HSBC (NYSE: HBC ) had the misfortune of reporting ghastly earnings
before a dreadful trading day. HSBC not only announced a 36% drop in
third-quarter adjusted profits , but it warned it might have to leave the U.K.
over a possible $2.5 billion annual hit from new regulations. HSBC's stock
dropped about 9% almost immediately and never recovered, ending at $39.99. But
even strong earnings reports weren't enough to stem the Italian tide. General
Motors (NYSE: GM ) reported EPS of $1.03 on Wednesday , a drop from a year ago
but a seven-cent beat of analyst expectations, and its revenues of $36.7 billion
were right on target. GM's reward? A nearly 11% haircut, with GM stock at
$22.31 by day's end. Unsurprisingly, other foreign financials were shredded
Wednesday, with ING Group (NYSE: ING , $7.49), Barclays (NYSE: BCS , $10.71),
Royal Bank of Scotland (NYSE: RBS , $6.59) and Deutsche Bank (NYSE: DB , $36.13)
all eating losses of 10% or more. Three Up Barnes & Noble (NYSE: BKS ): Up
13.72% ($1.65) to $13.68. SodaStream International (NASDAQ: SODA ): Up 5.63%
($1.92) to $36.03. Best Buy (NYSE: BBY ): Up 1.42% (38 cents) to $27.22. Three
Down Rovi Corp. (NASDAQ: ROVI ): Down 38.66% ($17.79) to $28.23. Sina Corp.
(NASDAQ: SINA ): Down 10.86% ($9.44) to $77.50. Alpha Natural Resources (NYSE:
ANR ): Down 9.72% ($2.79) to $25.91. As of this writing, Kyle Woodley did not
own a position in any of the aforementioned stocks. Check out recaps from
previous trading days here .
No comments:
Post a Comment