Greece Stubbornly Pushes World Markets Down: US Stocks at 3 Month Low, Greeks Withdraw Euros
May 15th, 2012
Conservative Refocus Notes: We wrote an article describing what is happening now, both in Greece and in America. almost exactly two years ago. Were we right? Click on the above pic and let me know.....
By: JeeYeon Park
Stocks faded in the final hour of trading Tuesday to finish lower following news that Greek depositors withdrew 700 million euros from the nation's banking system and after Greece's leaders failed to agree on a coalition government.
The S&P 500 closed at 3-month lows, while the Dow logged its ninth loss in the last 10 sessions. Major averages are on pace for their biggest monthly losses since last September.
According to a transcript, Greek depositors recently withdrew 700 million euros from the nation's local banks, said President Karolos Papoulias, though the exact timing of the transfer was unclear.
"I think people need to prepare for the eventual removal of Greece from the EU and investors are getting ahead of that before they're forced to," said Matthew McCormick, vice president and portfolio manager at Bahl & Gaynor Investment Counsel on CNBC's "Closing Bell." "It's a political market and an event-driven market."
The CBOE Volatility Index, widely considered the best gauge of fear in the market, briefly spiked above 22.
All 10 S&P sectors finished in negative territory, led by energy and materials.
Earlier, Greek politicians failed to form a coalition government during their final talks, pushing the Athens Composite Index to a new 22-year low. A caretaker government is likely to be formed pending a new election next month. The euro fell below $1.28 following the announcement and European closed at new 2012 lows.
“The fundamental structural issues in Europe are still there and they’re not going to go away…they’ll continue to kick the can down the road because they’re only doing just enough to get by,” said Matt Lloyd, chief investment strategist at Advisors Asset Management.
Meanwhile, German GDP grew 0.5 percent in the first quarter as exports helped the economy bounce back from a contraction in the previous quarter.
“But two things that will change my attitude about this market is if we see a depression in Europe and a hard-landing in China,” he cautioned.
While Lloyd expects volatility to continue, he says investors should take advantage of the dips. In particular, he likes techs, consumer discretionary and some financials including JPMorgan.