Dow dropped 99 (but off the lows), decliners over advancers almost 7-1 & NAZ lost 22. Bank stocks led the selling again, taking the Financial Index down 3 to 196 (a 3+ month low). The MLP index fell1+ to the 382s (near its lows set 1 month ago) & the REIT index fell 2 to the 258s. Junk bond funds slipped lower & Treasuries rose as Greece edges towards Euro exit. Oil fell to the lowest level in almost 5 months amid growing speculation Greece may leave the euro region & as Saudi Arabia’s oil minister said prices should decline further. Gold fell to a 4½-month low, hit by concerns about a worsening debt crisis which put pressure on the €.
Photo: Bloomberg
Fierce political rivalries kept Greece from resolving its leadership crisis as an anti-bailout party refused to return to power-sharing talks. For 9th straight day, Greek party leaders were struggling to form a new coalition gov, driven by differences over the harsh austerity measures demanded by intl creditors in return for rescue loans. The impasse means the country is facing the prospect of another national election next month after holding an inconclusive ballot May 6. Talks led by President Karolos Papoulias failed Sun to break the impasse sending shares on the Athens Stock Exchange down 4.4% at 584. The conservative New Democracy party won the May 6 election, but the poll failed to produce an outright winner. But Alexis Tsipras, leader of the 2nd-placed, left-wing Syriza party, has refused to join a coalition, demanding that the terms of an international bailout be scrapped or radically renegotiated. "They are looking for an accomplice to continue their catastrophic work — we will not help them," a Syriza spokesman said. Many see fresh elections as inevitable. But a new poll could see anti-austerity parties gaining more support & prompt a rift in 17-nation eurozone & raise the risk of a Greek exit from the shared currency. Nobody where this leads, sending markets across the globe to tumble.
Spain raised €2.9 B ($3.8B) Mon in a short-term bond auction, but concerns over the future of the € currency union pushed investors to demand higher interest rates to lend the money & caused the Madrid stock market to plummet. Spain paid 3% to sell €2.2B ($2.8B) in 12-month notes, compared with 2.6% in the last such auction Apr 17. It paid 3.3% to sell €711M ($920M) in 18-month notes, up from 3.1%. Demand for the bonds was good (about double the amount offered in the 12-month category & nearly triple for the 18-month notes). But the total amount sold was just short of the upper target of €3B ($3.9B). However that could not mask the concerns of investors, who fear that because Greeks voted heavily in favor of parties that want to either cancel or renegotiate the intl bailout, the country may be forced to default &, ultimately, leave the eurozone. Spain, which is considered the next most likely country to need a bailout in Europe. The stock index in Madrid plunged 2.8% on Mon, slightly more than other European markets, while bond yields in the secondary market rose sharply. The yield on benchmark 10-year bonds jumped 28 basis points to 6.27%. In comparison, the yield for the benchmark German bund fell to 1.44%, making for a spread of 483 basis points against the Spanish bond. Yields of 7% are considered too expensive for a gov over the long term. Spain's 10-year yield hit 6.7% late last year. Spain gets shakier every day.
Spain raises nearly $3.8 billion in debt auction AP
Photo: Bloomberg
Facebook (FB) plans to stop taking orders for its IPO tomorrow, 2 days ahead of schedule, after US markets close tomorrow. The company is offering 337M shares at $28-$35. It is reported that "they’re swamped with the orders." FB is seeking a market value of as much as $96B. At that level, FB would surpass UPS (UPS) as the most valuable company in history to go public in the US. But some institutional investors had balked at buying FB over concern about its growth prospects. Mark Zuckerberg is building demand for the IPO with the roadshow, trying to convince investors that FB can make money from mobile users. If the stock market remains soggy, the IPO could be less successful than fans are hopping for.
Facebook Said Set to Stop Taking Orders for Share Sale Ahead of Schedule
Markets are selling off again on increased confusion over the Greek debt mess & where the country is going. The € dropped to a 3 month low at $1.284. There are no brilliant thoughts in this environment. Chances are great there will be another Greek election next month which will prolong the agony about where Greece is going. Spain is not that far behind. Its problems are going from bad to worse with no solutions insight. Dow is down almost 700 from the highs at the start of May & is clearly on defense...
JPMorgan Chase Capital XVI (AMJ)
Treasury yields:
U.S. 3-month | 0.092% | |
U.S. 2-year | 0.262% | |
U.S. 10-year | 1.774% |
| CLM12.NYM | ...Crude Oil Jun 12 | ...94.37 | .... 1.76 (1.8%) |
| GCK12.CMX | ...Gold May 12 | ...1,563.10 | ... 20.50 (1.3%) |
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Fierce political rivalries kept Greece from resolving its leadership crisis as an anti-bailout party refused to return to power-sharing talks. For 9th straight day, Greek party leaders were struggling to form a new coalition gov, driven by differences over the harsh austerity measures demanded by intl creditors in return for rescue loans. The impasse means the country is facing the prospect of another national election next month after holding an inconclusive ballot May 6. Talks led by President Karolos Papoulias failed Sun to break the impasse sending shares on the Athens Stock Exchange down 4.4% at 584. The conservative New Democracy party won the May 6 election, but the poll failed to produce an outright winner. But Alexis Tsipras, leader of the 2nd-placed, left-wing Syriza party, has refused to join a coalition, demanding that the terms of an international bailout be scrapped or radically renegotiated. "They are looking for an accomplice to continue their catastrophic work — we will not help them," a Syriza spokesman said. Many see fresh elections as inevitable. But a new poll could see anti-austerity parties gaining more support & prompt a rift in 17-nation eurozone & raise the risk of a Greek exit from the shared currency. Nobody where this leads, sending markets across the globe to tumble.
Spain raised €2.9 B ($3.8B) Mon in a short-term bond auction, but concerns over the future of the € currency union pushed investors to demand higher interest rates to lend the money & caused the Madrid stock market to plummet. Spain paid 3% to sell €2.2B ($2.8B) in 12-month notes, compared with 2.6% in the last such auction Apr 17. It paid 3.3% to sell €711M ($920M) in 18-month notes, up from 3.1%. Demand for the bonds was good (about double the amount offered in the 12-month category & nearly triple for the 18-month notes). But the total amount sold was just short of the upper target of €3B ($3.9B). However that could not mask the concerns of investors, who fear that because Greeks voted heavily in favor of parties that want to either cancel or renegotiate the intl bailout, the country may be forced to default &, ultimately, leave the eurozone. Spain, which is considered the next most likely country to need a bailout in Europe. The stock index in Madrid plunged 2.8% on Mon, slightly more than other European markets, while bond yields in the secondary market rose sharply. The yield on benchmark 10-year bonds jumped 28 basis points to 6.27%. In comparison, the yield for the benchmark German bund fell to 1.44%, making for a spread of 483 basis points against the Spanish bond. Yields of 7% are considered too expensive for a gov over the long term. Spain's 10-year yield hit 6.7% late last year. Spain gets shakier every day.
Spain raises nearly $3.8 billion in debt auction AP
Facebook (FB) plans to stop taking orders for its IPO tomorrow, 2 days ahead of schedule, after US markets close tomorrow. The company is offering 337M shares at $28-$35. It is reported that "they’re swamped with the orders." FB is seeking a market value of as much as $96B. At that level, FB would surpass UPS (UPS) as the most valuable company in history to go public in the US. But some institutional investors had balked at buying FB over concern about its growth prospects. Mark Zuckerberg is building demand for the IPO with the roadshow, trying to convince investors that FB can make money from mobile users. If the stock market remains soggy, the IPO could be less successful than fans are hopping for.
Facebook Said Set to Stop Taking Orders for Share Sale Ahead of Schedule
Markets are selling off again on increased confusion over the Greek debt mess & where the country is going. The € dropped to a 3 month low at $1.284. There are no brilliant thoughts in this environment. Chances are great there will be another Greek election next month which will prolong the agony about where Greece is going. Spain is not that far behind. Its problems are going from bad to worse with no solutions insight. Dow is down almost 700 from the highs at the start of May & is clearly on defense...
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