Stocks fall as focus shifts to Greece
David Russell | [email protected]
S&P 500 futures are down by about half a percent and have been negative all morning. German and French indexes were higher but have now turned red as the euro tumbles. This morning's weakness comes one day after the S&P 500 advanced by 0.08 percent and after Barack Obama was reelected to a second term as president.
Obama's victory may cause selling in coal miners in particular, which led the market over the last month. Events in Europe are also important, as Greek lawmakers are scheduled to vote on unpopular austerity measures that are considered necessary for the country to avoid a sovereign-debt default.
The euro is lower across the board ahead of the news, while the Japanese yen is higher against most other currencies. That kind of price action is consistent with risk aversion.
Commodities are also showing caution toward the global economy. Oil is down by more than 1 percent, while copper fell by two-thirds of a percent. Precious metals and agricultural foodstuffs are mixed.
In addition, Germany reported that industrial production contracted by 1.8 percent in September, while economists were expecting a drop of only 0.5 percent. The big question for investors now is whether the United States and emerging markets are strong enough to keep the global economy out of recession.
In company-specific headlines, News Corp. is higher by about 2 percent after quarterly earnings beat estimates. Contract manufacturing company Plexus is shedding one-quarter of its value after losing Juniper Networks as a customer. Rubicon Technology and LivePerson are also lower after reporting weak revenue and issuing weak guidance.