A Barrage of Bad News Destroys the Dow
This morning I wrote that Thursday's start to the EU Summit, a meeting of policymakers looking to solve the ongoing debt crisis, would be one of the main events for investors to watch this week. However, one thing I didn't expect was the news out of Europe to start hard and fast first thing Monday morning. But that's just what happened, with a stream of crisis-escalating headlines:
- Spain provided an official request for a bank bailout, though an official number wasn't provided.
- The island of Cyprus became the fifth company in the eurozone to request emergency aid, joining Greece, Ireland, Portugal, and Spain.
- German Chancellor Angela Merkel reiterated her opposition to "Eurobonds," or a form of debt that would be jointly underwritten by all 17 eurozone member countries. The idea has been considered a potential solution to come out of this week's summit.
- The Greek finance minister announced his resignation following less than one week in office.
With those headlines as a backdrop, equity markets opened sharply lower and continued to lose ground throughout the day. Let's look at how the major U.S. indices finished on the day.
Gain / Loss
Gain / Loss %
|Dow Jones Industrial Average (INDEX: ^DJI)||(138.1)||(1.09%)||12,502.7|
Source: Yahoo! Finance.
Turning to individual stocks, Bank of America (NYS: BAC) declined the most of all Dow components, down 4.3% on the day. Tech player Hewlett-Packard (NYS: HPQ) also took it on the chin, down 4.1% as the broader information technology sector fell 2.3%, the worst among all S&P sectors.
The McClendon Show goes on
Away from the Dow, shares of Chesapeake Energy (NYS: CHK) and its leader, Aubrey McClendon, were back in focus following a Reuters investigation uncovering a collusive plot to keep land acquisition prices low. According to the report, the company coordinated with Encana (NYS: ECA) so that one wouldn't bid against the other during their efforts to acquire Michigan land back in 2010. The allegations of anticompetitive behavior drove Chesapeake shares down 8.5%, while U.S.-listed shares of Encana fell 4.1%.
Don't let the stream of scandalous news coming out of Chesapeake Energy drive you away from the energy sector. It remains an area of incredible opportunity for investors, with one such prospect outlined in our special free report: "The Only Energy Stock You'll Ever Need." In it, we outline one of the best-positioned energy companies in the world with a long history of outperformance. To uncover what company this is, simply claim your free copy of this report.
The article A Barrage of Bad News Destroys the Dow originally appeared on Fool.com.Brenton Flynn owns shares of Chesapeake Energy. The Motley Fool owns shares of Chesapeake Energy and Bank of America.Motley Fool newsletter serviceshave recommended buying shares of Chesapeake Energy. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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