The nice rebound in the stock market yesterday proved to be short lived as investors resumed the massive sell-off accelerated by the recent Standard and Poor’s downgrade of the U.S. credit rating. The culprit for today’s sell-off seems to be the rising tension of the European Union’s debt crisis and the seemingly ineffective strategy from the ECB. Shares of Walt Disney Co. (DIS) are among the biggest decliners as the media empire released less than stellar earnings, dropping shares by over 10 percent on the day. Apple (AAPL) shares are down over 1 percent, but has retaken the lead as America’s largest company with Exxon Mobile (XOM) down nearly 3 percent on the day. The recent market uncertainty may also have taken some shine off the IPO market as Groupon (GRPN) said that after adjusting its accounting for the second quarter, the company actually reported a $102.5 million loss for Q2 revenue grew to $878 million. Investors, meanwhile, are still in search of safe-haven investments as witnessed by the rise in U.S. treasuries and gold’s impressive surge to over $1,800 an ounce earlier today.
Major U.S. Stock Indices
DJIA: 10,853.67 (-3.44 percent)
S&P 500: 1,135.59 (-3.15 percent)
NASDAQ: 2,411.79 (-2.85 percent)
Russell 2000: 673.32 (-3.28 percent)
In other news:
- Initial reaction to the appointees thus far for Congress’ Super Committee to find $1.5 trillion in budget savings has been discouraging. [Bloomberg]
- Capital One (COF) is making big purchases during this downturn, acquiring HSBC’s (HBC) U.S. credit card business for $2.6 billion. The company bought ING’s U.S. online banking division in June for $9 billion. [WSJ]
- Web content company Demand Media (DMD) shares are up 10 percent after announcing strong earnings and an extension deal with Google (GOOG). [Marketwatch]
- JP Morgan (JPM) took offense to popular Wall Street analyst Meredith Whitney calling banks “zombies.” [CNBC]
- How to tell if stocks are cheap? Ignore historic price-to-earnings ratios and focus on cyclically-adjusted P/E instead. [Economist]
Check back for more news.