Monday, December 19, 2011

STOCKS SLIDE AND BANKS GETS CRUSHED: Here's What You Need To Know, December 19, 2011

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Monday, December 19, 2011

STOCKS SLIDE AND BANKS GETS CRUSHED: Here's What You Need To Know

Sam Ro | Dec. 19, 2011, 4:00 PM | 868 | 8

As if problems in Europe weren't enough, we now have to deal with some uncertainty in North Korea.

First, the scoreboard:

Dow: 11,766.5, -99.9, -0.8%
S&P 500: 1,205.4, -14.3, -1.2%
NASDAQ: 2,523.1, -32.2, -1.3%

And now, the top stories:

By now, you've heard that North Korea's Kim Jong-Il died last night. Any internal instability would probably have a negligible effect on the global economy as North Korea is isolated and is almost completely shut off from the rest of the world. However, experts are concerned that North Korea may now take some sort of aggressive military action in a show of strength. Nomura is calling it a black swan risk. Political risk expert Ian Bremmer warns "This is a very dangerous time." The economy most at risk is neighboring South Korea, whose stock market plummeted in today's trading. SEE ALSO: This Is What South Korea's Economy Will Be Like In 2012 And 2013 >
Speaking to European Parliament today, ECB president Mario Draghi said that austerity measures would probably come with short-term contractions.
EU Finance Ministers held a conference call today to discuss providing €200 billion ($261 billion) in aid through the IMF. In a statement published this afternoon, however, they said they were able to agree to only €150 billion ($195 billion) in IMF support. The stock markets hit new lows on the news. 10 Huge Geopolitical Risks That Could Rattle Markets In 2012 >
Financials took a beating today. The Wall Street Journal reported that the Fed would announce that it was on board with the capital requirements laid out in Basel III. This would include the so-called SIFI capital surcharge for the largest financial institutions. Morgan Stanley, Citigroup, and JP Morgan Chase all fell. Bank of America fell below $5.
Caterpillar said its machine sales jumped 30% year-over-year. This resilient figure was welcome news following last week's news that management issued weaker-than-expected guidance for this year and next. The maker of earthmovers is widely recognized as a bellwether of the global economy. The stock closed up 0.1%.
Cablevision was one of the best performers in the S&P 500 today, climbing 2.0%. The stock sank on Friday following disappointing earnings. But Citigroup added Cablevision to its exclusive Top Picks Live! list. "While understandable, we think the market's reaction is a touch extreme," said the analyst regarding last Friday's sell-off. "We see compelling value in Cablevision's shares at these levels."
Zynga shares sold off again just days after its IPO. The stock fell 4.7% to $9.05, which is well below its $10 IPO price.
Don't Miss: Wall Street Loves These 19 Stocks, So You Should Probably Avoid Them >