Wall Street is starting the week with a massive sell-off as the S&P 500 is down 1.75 percent and the Dow Jones Industrial Average is 1.29 percent. The NASDAQ is down about 2 percent as well. The cause of the fall seems to stem from growing concerns among investors that the European Union’s debt crisis could spread to larger economies like Italy and Spain. Greece is expected to receive the second tranche of its bailout package after the nation’s government agreed on a new austerity plan. Meanwhile, in the U.S., unemployment rose to 9.2 percent after the U.S. Department of Labor said jobs growth was much worse than previously expected in June, and revised its May estimates lower. A new report from Moody’s Analytics also showed that about 20 percent of personal income going to Americans last year came from government social programs like unemployment benefits, food stamps Social Security and disability. With many of these benefits set to expire soon, consumer spending could be much worse than it already is, and many households will see much more challenging economic conditions. Elsewhere, oil prices have slumped today to about $95 a barrel, while gold and silver prices saw a slight boost.
Major U.S. Stock Indices
DJIA: 12,500.54 (-1.27 percent)
S&P 500: 1,320.18 (-1.76 percent)
NASDAQ: 2,803.98 (-1.95 percent)
Russell 2000: 835.02 (-2.06 percent)
In other news:
- Wall Street has high hopes on Alcoa’s (AA) earnings report. Wall Street analysts expect aluminum demand from companies like GM (GM) and AMR Corp. (AMR) to help Alcoa double its profits for Q2. [Bloomberg]
- Dunkin Donuts (DNKN) is dipping into the public markets with an IPO expected to raise $460 million, about 15 percent more than it had expected in May. Shares are expected to be priced around $16 to $18 per. [NY Times]
- Are all China stocks listed on U.S. exchanges junk? No, but there’s certainly a growing sentiment to prove otherwise. [Marketwatch]
- How pharmaceutical companies have been dealing with the impending pipeline drought they’ve faced for years now. [WSJ]
- Jim Rogers talks about why commodities can’t lose. [CNBC]
