Stocks struggle as crisis in Europe deepens

European debt troubles remain in the foreground, and protests turn violent in Spain and Greece. US new-home sales fall, but prices soar. RIM advances after announcing more subscribers.

By Melly Alazraki Sep 26, 2012 9:28AM
stock marketUpdated 12:06 p.m. ET

A day after the Dow posted its biggest one-day loss in nearly a month, U.S. stocks slipped as investors followed the unfolding events in Europe, specifically in Spain and Greece. Stocks remained lower after data showed new-home sales fell in August, though prices soared.

The Dow Jones Industrial Average ($INDU) was was down 10 points at 13,447. The S&P 500 ($INX) was down 5 points at 1,436. The Nasdaq Composite ($COMPX) was down 22 points at 3,096.

Tuesday's sell-off
On Tuesday, Charles Plosser, the president of the Philadelphia Federal Reserve Bank, said he does not believe the Fed's latest stimulus campaign will do anything for economic growth. Markets skidded after his comments.

The Dow Jones industrials ($INDU) fell 101 points to 13,458, their third straight decline. The S&P 500 ($INX) was off 15 points to 1,442, and the Nasdaq Composite ($COMPX) was down 43 points to 3,118, its second loss in a row. Apple (AAPL), the biggest influence on the Nasdaq-100 ($NDX), was down $17.25 to $673.54.

Concerns over the effect of a slowing global growth on company profits also heightened Tuesday after Caterpillar (CAT) became the latest high-profile company to cut its outlook.
Housing data in focus
After positive housing data Tuesday, figures were mixed Wednesday. Sales of new single-family homes in the U.S. fell slightly in August but held near two-years highs. Sales dipped to 373,000 from July's slightly revised level of 374,000, the Commerce Department said. Economists had expected new-home sales to reach 380,000, according to Briefing.com.

The median sales prices, however, soared by 11.2% in August to $256,900, the highest level in more than five years and the biggest monthly increase ever recorded.

Housing data released Tuesday showed home prices increased for the fourth month in a row, to their highest level in nearly two years. Although cheered at first by the data, markets reversed course after Plosser's remarks.

Applications for U.S. home mortgages rose 2.8% last week, the Mortgage Bankers Association said Wednesday, as interest rates dropped to record lows in the wake of the Fed's latest stimulus efforts.

Concerns about Spain and Greece

Meanwhile, in Spain, anti-austerity protests in Madrid turned violent. Also, the Catalonia region announced early elections that could lead to the country's most economically important region to declare independence from Spain.


The Spanish government is expected to announce the 2013 budget and an economic plan on Thursday. Some observers are speculating the government might announce a bailout, while others think it will wait until Italy asks for help as well. Borrowing costs, however, surged for Spain on Wednesday. Not helping matters was a letter from Germany, Finland and the Netherlands on Tuesday implying that any rescue funds Spain receives for its banks will remain part of its public debt.


Another problematic eurozone country, Greece, is facing a 24-hour general strike to protest austerity measures. Meanwhile, European Central Bank executive board member Joerg Asmussen said in a newspaper interview Wednesday that the ECB won't take part in any potential debt restructuring of Greece and that the country's external financing needs can be met only by member states.


Global markets

As worries over Spain and Greece escalated, European stock markets moved sharply lower, following Wall Street and Asia markets' steep declines that were prompted by Plosser's comments. 


Asian markets suffered a sell-off Wednesday, with Chinese stocks falling to their lowest level since January 2009 and Japanese shares tumbling as many companies began to trade without rights to their latest dividend payouts.


The euro fell to a more than two-week low against the dollar, while the dollar strengthened against a basket of six major currencies. Crude oil futures extended their losses, falling below $91 a barrel in Asian trading.


Stocks to watch
Research In Motion (RIMM) shares rose in after-hours trading Tuesday after the smartphone maker said it had added 2 million subscribers to its BlackBerry service and showed off a new mobile operating system, which won't be out until next year.

Jabil Circuit (JBL) shares were down after the provider of electronic-design services reported lower profits that missed analyst estimates. The company also issued a fiscal-first-quarter earnings outlook late Tuesday that also fell short of most analysts' forecasts.

RadioShack (RSH) said CEO James Gooch will step down effective immediately as the company seeks to revive its flagging fortunes, Reuters reported. CFO Dorvin Lively will be the interim CEO.
300Comments
Sep 26, 2012 9:49AM
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The Facebook business model very well could have been designed by the KGB.  Many besides myself have concluded this seemed an innocent business model whereby people were encouraged to communicate openly with friends and  relatives. Only to find out later their seemingly innocent private conversations gleamed information others were/are willing to pay for.  This glistening innovative idea of a free open forum whereby folks could share with each other their lives, dreams ,concerns, and special interests on a daily basis seemed full of promise but now looks like a shoddy two bit marketing ploy. Nothing is ever free and now it seems it has morphed itself into the go to "arrangement" for spying on unsuspecting users to benefit themselves and the businesses they sell private information to for a profit.  I was just as naive as the next person.  Similarly I voted for Obama with the same idea of his being an open, fair, and compassionate person.  Two  foolish decisons both encouraged by slick marketing ploys. I am now distancing myself from both.
Sep 26, 2012 9:38AM
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MADE IN AMERICA=We will no longer buy products  MADE IN CHINA=  Enough is Enough !   Bring back AMERICA TO AMERICANS !
Sep 26, 2012 11:07AM
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"Since the economic recovery started in June 2009, household incomes are down 5.7%, the Sentier data show, and they are down more than 8% since Obama took office."

Damn I hate facts.....
Sep 26, 2012 11:03AM
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Government added 4,000,000,000 more to the deficit every day so far this year. Ben is shoveling in ?,000,000,000 into the market every day. Where is the audit of the Fed. Harry? Thanks for squashing Rand Paul's call for a full audit. Liberal sleaze ball politics under the direction of the imposter messiah. Obama lied when he said you can't change Washington from within. His Chicago mob style rule has proven that by him protecting the crooks in his cabinet at the tax payer's expense. No real solutions, just empty promises and plenty of blame to go around.

Sep 26, 2012 9:54AM
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"This was the Spanish dream: new developments, luxury apartments, the good life. But it was all on borrowed money. Now the developers have lost their investments, the banks are in crisis, and increasing numbers of Spaniards are homeless"

 

USA next

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Yep the real housing market data is horrible but hey what do you want to believe the horrible truth or the rose colored Obama numbers.

 

So much for a housing recovery it's tanking again.

 

 

QUOTE

New home sales in August hit an annualized rate of 373,000, which is slightly down from July's revised rate of 374,000, and worse than the rate of 380,000 that had been broadly expected.

END QUOTE

Sep 26, 2012 10:55AM
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al 2010 said - "The first thing that must be done to begin to repair America's economy is to tell the American people the truth."

100% correct!  This should include the truth about our deficits, debts and unfunded liabilities.  It should also include the truth about gov spending - specifically defense spending, entitlement spending and "bridge to nowhere" spending.  In addition, a full audit of the Federal Reserve and of our physical gold holdings should be conducted and made public.

“When you want to help people, you tell them the truth. When you want to help yourself, you tell them what they want to hear.”- Thomas Sowell

Most of our politicians only tell us what we want to hear.
Sep 26, 2012 10:31AM
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Just Enter       Last night at the UN the president of Egypt asked for a  resolution that would classify any speech against the prophet Mohammed declared  as hate speech and punishable.
 Is this the beginning of the NEW Muslim world, and a NEW WORLD ORDER? SHARIA LAW?
Sep 26, 2012 10:05AM
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They should rename it "The New World Disorder"

 

 

Sep 26, 2012 11:02AM
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They will never tell us the truth because it would not be good re-election strategy. The MOST important thing in the life of any politician is re-election. The truth be damned.

Their plan is to keep kicking the can down the road until they have secured enough entitlements, kick backs, bribes, etc to live on and pass the problems on to the next person in charge. 
Sep 26, 2012 9:46AM
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Dollar is up again and the broader market is down. Can Ben shovel faster than the tide? we'll see if he earns his stripes from the presidents whip.
Sep 26, 2012 11:14AM
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WASHINGTON, DC:  The White House announced that for the first time in decades, our sitting American President spoke at the United Nations but chose not meet with even one world leader at the United Nations General Assembly meeting.  Further, it is now believed that Barack Hussein Obama is actually Chauncey Gardiner!  The White House also stated that this is the fault of George W. Bush also!

 

For fun watch the video included... this could easily be Obozo on the www  

 

Sep 26, 2012 11:15AM
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Mohamed was a great man. He taught the world about peace and love. And if you do not believe this and and accept it, we will behead you and your entire family.....in the name of Allah.
Sep 26, 2012 10:39AM
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hmmm...debt crisis in Europe...  You mean the people that vote for a living will riot rather than work to continue their handouts?

How can it be austerity when the Greek and Spanish governments are STILL RUNNING huge deficits?  

You cannot BORROW, PRINT, TAX and SPEND your way to prosperity, PERIOD!
Sep 26, 2012 11:29AM
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Here's a few article ideas

 

EU woes Monday- EU bailout measures Friday.

Fiscal cliff problems Monday - Emergency vote saves day Friday.

Layoffs jobs problems Monday - Unemployment claims down Friday.

Housing slump Monday - Recovery outlook in housing sector Friday.

Greece woes Monday - Greece bailout plan Friday.

Retailers outlook grim for Holiday's Monday - Retailers great outlook Friday.

Housing foreclosures up Monday - Housing starts up Friday.

Auto sales up Monday - Auto industry says new bailout needed Friday.

Banks offer homeowners relief Monday - No one qualifys for re-fi loans Friday.

 

THESE ARTICLES ARE NOTHING BUT BS

Sep 26, 2012 11:59AM
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Here is what the future in investing looks like.

Markets soar on expectations of QE (insert number here).

Housing sales slump. Markets soar.

Housing prices skyrocket. Markets soar.

Building owners now renting shoe box size apartments for big bucks. Markets soar.

Food prices off the charts. Market soars.

Nations Declare Water Shortages. Markets soar.

Boone Pickens Corners the Air You Breathe Market. Markets soar.

Tuna Climbs to $1,000,000.00 per Fish. Markets Soar.
Gas Prices Rise to $20.00 per Gallon on Consumer Confidence. Market soar.

Payrolls Plummet for 50TH Year in a Row. Markets soar.

Government declares middle class officially dead. Markets soar.

Unemployment increases. Markets soar.

Capitalism Declared Dead. Markets soar.

Free Enterprise Declared Dead. Markets soar.

Employers decree no more employees needed ever. Everything Profit. Markets soar.

Social Security goes belly up. SS Tax remains. Markets soar.
President declares all pensions illegal. Government and Wall Street divy up funds. Markets soar.

April 16 Declared National Greed and Avarice Day. Markets soar.

Adolf Hitler, Jr. assumes control of NYSE. Markets soar.

I could do this forever.

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BUT BUT BUT THERE IS FREE MONIES BEING HANDED OUT BY BERNANKE TO HIS SUPER RICH FRIENDS. ALL IS OK FOLKS.

 

Folks there is no crisis in Europe heck the Wall Street bankers over there are getting trillions of euros from the European Central Bank. In order to pay for the new laons the super rich are taking out over there to increase their wealth they (the 1 percenters) just want most of Europe to get paid what Chinese workers get paid 25 cents an hour so that the huge profits the 1 percenters will make off keeping prices at levels as if people were making $100,000 euros a year and only getting paid 25 cents an hour.

 

The increased profit margins will work wonders for the bottom lines of all European companies expect those silly enough to have moved operations over to Chinese where the minimum wage is going up to 50 cents an hour.

 

Yep European companies are going to be floating in euros soon as they get trillions from their central banks and double their profits by decreasing their labor costs.

 

Yep FREE MONIES OUT THERE GRAB YOURS before the Wall Street bankers get it all

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What was that song from the 1970's ??

 

Burn baby burn???

 

seems like Spain and Greece are a burning now.

 

And it will not go away as these people now have nothing to lose.

Sep 26, 2012 11:57AM
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In a corresponding article headline it reads, " August new home sales dip, but prices scale 5-year high".  Interpretation:  They can ask any price they want, but can't sell them at that price.  What kind of infantile BS is this to paint an inaccurate picture?
Sep 26, 2012 10:15AM
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We better find a way to buy our own products and adjust to the price increase ! If we don't we our going to lose this great country to foreign influence ! Where is our pride of ownership ?  MADE IN AMERICA
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