Yesterday US stock markets declined by 3.5% (the lowest level since August). The decline was initiated by an increase in the Italian bond yield, which pushed the eurozone’s 3rd largest economy deeper into the debt crisis.
The 10-year Italian Bond yield reached 7,495%. That is the highest level since the creation of the common European currency. Investors started selling Italian bonds after the margin requirements were raised. The 7% limit is considered to be critical. When Irish and Portuguese bond yields reach the 6% limit, Ireland and Portugal asked for external financial aid to be able to further service their public debts.
Besides, the rumors about the possibility of some eurozone members leaving the currency union caused more concerns among market participants.
Dow Jones Index declined by 389,24 points or 3,20% down to 11.780,94 pts. , S&P 500 dropped down to 46,82 pts or 3,67% down to 1.229,10 pts , Nasdaq Composite lost 105,84 points or 3,88%, thus declining down to 2.621,65 pts.
All the sectors saw a decline. The frontrunners are the USA’s banking sector (-6,341%), motor industry (-5,778%) – financial services (-5,124%).
The frontrunners of the financial sector decline: Morgan Stanley declined by 9%, Goldman Sachs Group Inc. - 8,2%, Citigroup Inc (-8,057%), JPMorgan Chase&Co (-7,023%), American Intl Group Inc (-6,356%). Bank of America Corp.( - 5,7%):
Today European stock markets opened with a decline on concerns over the current economic and political situation in Italy.
Jose Manuel Barroso warned about the economic consequences of damaging the eurozone integrity and called upon Germany to help the eurozone to come out of the debt crisis, saying that if at least one member leaves the eurozone Germany’s GDP will shrunk by 3%, thus leaving 1 million Germans unemployed.
