Italy Crisis Pounds U.S. Markets — Wednesday’s IP Market Recap

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tdp2664 InvestorPlace 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 .