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Stocks Fall Sharply Amid Renewed Europe Worries - U.S. Commentary

With traders expressing renewed concerns about the financial situation in Europe, stocks have moved sharply lower in early trading on Wednesday. The major averages have shown notable moves back to the downside after ending the previous session firmly in positive territory.

The major averages have edged up off their lows in the past few minutes but continue to post steep losses. The Dow is down 124.42 points or 1 percent at 12,456.27, the Nasdaq is down 37.93 points or 1.3 percent at 2,833.06 and the S&P 500 is down 14.89 points or 1.1 percent at 1,317.53.

The early weakness on Wall Street reflects worries about the impact of rising Italian and Spanish bond yields as well as the results of a new poll showing the anti-bailout Syriza party in the lead in next month's elections in Greece.

Disappointing guidance from Research in Motion (RIMM) has also generated some negative sentiment, with the Blackberry maker saying it now expects to report an operating loss for its first quarter. The company attributed the forecast of a loss to the competitive environment.

Oil service stocks have shown a substantial downward move in early trading, moving lower along with the price of crude oil. With crude for July delivery tumbling $1.95 to $88.81 a barrel, the Philadelphia Oil Service Index is falling by 3 percent.

Significant weakness has also emerged among steel stocks, which helped to lead the markets higher in the previous session. Networking, natural gas, and housing stocks have also pulled back sharply after posting strong gains on Tuesday.

Most of the other major sectors have also come under pressure in early trading, reflecting broad based weakness in the markets.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index ended the day down by 0.3 percent, while Hong Kong's Hang Seng Index plummeted by 1.9 percent.

The major European markets have also shown notable moves to the downside on the day. The German DAX Index is down by 1.3 percent, while the U.K.'s FTSE 100 Index and the French CAC 40 Index are down by 1.6 percent and 1.8 percent, respectively.

In the bond market, treasuries have moved sharply higher amid the renewed worries about Europe. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, has plunged 7.8 basis points to a record low of 1.653 percent.

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