Monday, December 12, 2011

STOCKS TANK AND EUROPE IS STILL IN CRISIS: Here's What You Need To Know, December 12, 2011

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Monday, December 12, 2011

STOCKS TANK AND EUROPE IS STILL IN CRISIS: Here's What You Need To Know

Sam Ro | Dec. 12, 2011, 4:00 PM | 820 | 4

The world had all weekend to digest last week's EU summit. From the looks of it, the markets agree with us that EU leaders solved nothing. Stocks returned most of Friday's unexpected gains.

First, the scoreboard:

Dow: -162.9 pts, -1.3%
S&P 500: -18.7 pts, -1.5%
NASDAQ: -34.6 pts, -1.3%

And now, the top stories:

Last Friday's post-EU summit stock market rally surprised a lot of people given how little the EU leaders actually accomplished. Specifically, the summit offered no solutions to the near-term crisis, which continues to push the eurozone to the brink.
Moody's splashed some cold water on the markets early this morning, warning that the EU sovereign debt ratings were still at risk of a downgrade as early as the first quarter of 2012. "Overall, Moody's believes that the announced measures reflect the continuing tension between euro area leaders' recognition of the need to increase support for fiscally weaker countries and the significant opposition within stronger countries to doing so. Amid growing pressures on euro area authorities to act quickly to restore credit market confidence, the constraints they face are also rising," wrote the ratings agency. Fitch also offered its two cents, saying that EU leaders made some progress but came no closer to an "immediate comprehensive solution."
European markets sold off with Italy's FTSE-MIB index falling 3.8%.
Gold was no safe haven today. The February futures contract settled at $1,668.20, down $48.60/oz or 2.8%. The 10-year Treasury yield fell to 2.02%. Don't Miss The Most Misunderstood Asset Class Today >
U.S. banks were big losers amid the European sell-off. Morgan Stanley and Citigroup were sharply lower. Here Are 20 Banks That Are Praying Europe Doesn't Go Bust >
Intel slashed its Q4 revenue guidance citing hard disk supply shortages related to the Thai floods. This is the second major Q4 warning from a tech giant in days. Last week Texas Instruments slashed guidance due to week demand. Intel lost 4.0% today.
Diamond Foods tanked after the company said it would miss its 10-Q filing deadline. This followed a WSJ report questioned the way the company pays its walnut suppliers. The stock closed down 22.8%.
Shares of Netflix jumped 6.2% on speculation that it could be acquired by Verizon. This followed a Reuters report last week that revealed Verizon was exploring the possibility of expanding into the streaming video market.
Vulcan Materials, the building materials company, is the target of a hostile takeover. Competitor Martin Marietta Materials made a $5 billion bid for the company. Vulcan shares closed up 15.4%.
Don't Miss: Morgan Stanley: This Is What Will Happen In India Over The Next Two Years >