Stocks slide as eurozone fears spread
Another Spanish region asks for aid. Spain's bond yields surge. The euro sinks to a 2-year low against the dollar. The IMF may not help with additional financing for Greece.
By Andrea Tse
Stocks stumbled Monday on anxiety that Spain will require a full sovereign bailout and that Greece won't be able to satisfy its bailout requirements and will have to exit the eurozone.
U.S. stocks also dropped sharply on Friday as soaring Spanish borrowing costs renewed concerns about Europe's debt crisis.
On Monday, Spanish bonds yields surged to their highest levels since the creation of the euro, even after the continent's finance ministers on Friday backed the details of an aid package worth up to 100 billion euros for Madrid to bolster its troubled banks.
Over the weekend, Murcia became the second Spanish region to ask for government financial aid, following Valencia's request late last week. Up to six regions may be next in line to ask for assistance.
The euro fell to more than a two-year low against the dollar amid worries about the deepening crisis across the eurozone.
Compounding the eurozone anxiety was a report by the German magazine Der Spiegel over the weekend that the International Monetary Fund may decide not to help with any more financing for Greece -- highlighting its growing impatience with the burdens of trying to help hold up the country -- as international inspectors visit Athens beginning Tuesday. They are expected to demand more spending cuts from Greek leaders in exchange for more aid.
The FTSE in London was down 2.1%, and the DAX in Germany was down 1.3%. The Hong Kong Hang Seng index settled down nearly 3%, and the Nikkei in Japan fell 1.86%.
McDonald's (MCD) reported below-consensus quarterly earnings and spoke of slower July same-store sales growth than in the second quarter.
Reporting after Monday's closing bell is chip-maker Texas Instruments (TXN).
Germany's Bayer and Onyx Pharmaceuticals (ONXX) said Monday that Tarceva, a jointly produced drug, in combination with Nexavar tablets for the treatment of hepatocellular carcinoma, a type of liver cancer, failed in further improvement of overall survival.
DreamWorks Animation (DWA) reached a deal to buy Classic Media for $155 million. Classic Media owns such titles as "Casper," "Rudolph the Red-Nosed Reindeer" and "Lassie."
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I wrote over a month ago that I think Greece will exit the Euro, Spain and Italy are in trouble and may follow, and this will hurt global markets. (Although I think if the Euro zone doesn't totally break up, Italy may struggle through and stay).
Will the US dollar survive?
If every last crook and fraudster from Wall Street were thrown in jail, there wouldn't be 1 single person left. The end of Fraud Street!
Send in the bulldozers!
Here's a little something for those of you who believe more taxes are necessary, from the latest column by Gerri Willis...
"The federal government actually runs 126 separate anti-poverty programs. They're managed by 13 different agencies."
"The federal government runs 33 different housing programs: 21 programs to provide food, eight healthcare programs, 27 cash or general assistance programs. It's hard to find a government department that doesn't run an anti-poverty program. All this adds up -- and this is just the federal government."
"If you also include state and local spending, the government will spend nearly a trillion dollars this year fighting poverty. That's almost the size of the national deficit this year."
"Now let me be clear, I don't object to poor people getting help. My problem is a government throwing money at programs that clearly aren't working. Consider this: All this welfare spending adds up to $20,610 for every poor man, woman and child in the country."
"For a poor family of three, that's nearly $62,000 dollars. The poverty line for that family is just $18,500. With this kind of spending, poverty should be wiped out - instead it's growing."
If we really want to fight poverty, we'd be much better off giving the entire welfare budget to the Salvation Army and let them dole it out. Hell, they could probably get 10 times better results with half the money.
Government is not the solution to the problem, government IS the problem, and no amount of tweaking, transforming, streamlining or re-structuring is going to change that. The only real solution is to shrink it.
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[BRIEFING.COM] The S&P 500 has slipped to fresh lows as the broader market continues to show weakness. Nine of ten sectors trade with losses larger than 0.5% while the consumer staples space registers a slim gain due to the relative strength of Procter & Gamble (PG 81.61, +2.91) following its management shake-up.
With the broader market seeing early losses, the CBOE Volatility Index (VIX 14.51, +0.44) is higher by about 3.0%.
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