After a brutal Friday that saw the Dow Jones (INDEX: ^DJI) down 2.23%, there was hope that a long weekend break could swing sentiment back to the optimists' corner. That hope will have to wait for another day.
The Dow is down 0.44% at 2:10 p.m. EDT. The S&P 500 (INDEX: ^GSPC) is faring even worse with a 0.53% drop. Declines in American markets come on the heels of another steep loss in Europe; the FTSE 100 closed down 1.14% today.
What's driving the markets
There wasn't a ton of news over the weekend. The big upcoming event -- the Greek elections between pro-bailout parties and those that would take actions leading to a euro exit -- is scheduled for June 17. As we saw last week, any kind of new polling that reports pro-bailout parties are making gains will lead to market gains. Any polls that show sentiment leaning toward parties that favor rejecting austerity measures -- i.e., the Syriza party -- will lead to another huge market drop.
Opinion polls are currently close enough that it's not known which faction will win popular support come election time. Whichever party wins, they'll have scant time available until Greece runs out of cash in early July.
Of course, wide-ranging problems in the eurozone have already led to slowdowns globally. The U.S. has had to revise down first-quarter GDP and just posted a second consecutive month of middling job gains. In China, the slowdown has caused policymakers to consider a stimulus. In Japan, the Nikkei fell 2% again today, dragging it down to a 28-year low! Everywhere you look, the world is holding its breath and watching Europe.
Back to U.S. markets
Energy, industrial goods, and basic materials are seeing the worst losses today. Oil has been on a wild ride, dropping below $81.50 a barrel before U.S. markets opened, but climbing throughout the day back to $83 a barrel.
Facebook (NAS: FB) is once again among the more actively traded Nasdaq stocks. Last week the company's fall couldn't be saved by a series of positive analyst targets, which pushed Facebook's average price target past $40 per share. Today, analyst optimism was stopped in its tracks with Bernstein research issuing a $25 price target on the company. Deceleration in growth was the key concern, with Bernstein citing difficulties hitting 2013 targets.
Groupon (NAS: GRPN) continues its own struggles. The company is down 7.5% on the day. That's led to a series of headlines noting that the company is now below the $6 billion Google had offered to purchase it at before its IPO. When the market's plummeting, it's a terrible environment for companies built on promise that haven't proven a model that can consistently churn out profits.
Take the long-term view
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At the time thisarticle was published Eric Bleeker owns shares of no companies listed above. The Motley Fool owns shares of Facebook and Google. Motley Fool newsletter services have recommended buying shares of Google. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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