The stock market had fallen slightly by midday Monday with all three major indexes off last Friday’s close. The Dow Jones Industrial Average index (DJI) was off 50 points, or 0.43%, to 11,815 at 12:00 noon Eastern Time on Monday. The NASDAQ Composite had dropped 10 points, or 0.40 percent, to 2,545 and the S&P 500 was down 7 to 1,212.
U.S. Treasury Yields Approach Recent Lows
The yield on a 10-year U.S. Treasury note was down in midday trading on Monday to 1.83 percent, which is near recent lows and demonstrates further strength in national sovereign debt in light of the European crisis. The Euro was up very slightly against the U.S. Dollar at 12:00 noon Eastern Time, but remains near the $1.30 mark and has lost more than 10% of its value as a currency since reaching Year To Date highs in April.
Midday Market Winners and Losers
Shares for Genworth Financial Inc. (NYSE: GNW) were down 6.4 percent to $5.86. The company offers wealth management, life insurance and mortgage guarantee insurance. Financial stocks took a significant hit in early Monday trading, with shares of Citigroup Inc. (NYSE: C) down 5.1% to $24.70 while Morgan Stanley (NYSE: MS) stock had lost 4.67% of its market value to $14.28 per share.
Cablevision Systems Corporation (NYSE: CVC) shares rebounded 3 percent in early Monday trading to $13.13 after falling sharply last week on news that COO Tom Rutledge had tendered his resignation. W.W. Grainger, Inc. (NYSE: GWW) shares had increased 1.76% to $182.14 by midday. The maintenance, repair and operating supplies company is near its YTD high of $191 per share.
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No ‘Silver Bullet’ Solution for European Sovereign Debt Crisis
European Central Bank President Mario Draghi told reporters early Monday morning that investor hopes of a “silver bullet” solution for the Eurozone’s sovereign debt crisis were unrealistic; further dampening hopes of a liquidity infusion to regional sovereigns. “People have to accept that we have to, and always will, act in accordance with our mandate and within our legal foundations,” said Draghi. “The important thing is to restore the trust of the people, citizens as well as investors, in our continent. We won’t achieve that by destroying the credibility of the ECB.” Draghi was referring to the ECB’s potential purchase of European sovereign bonds in several countries that are experiencing rising borrowing costs.
News spread quickly early Monday that European finance ministers were attempting to secure over $260 billion in International Monetary Fund crisis loans. Fitch Ratings has been capturing headlines in recent weeks due to its downgrade of long-term outlooks on several EU nations. The countries of Spain, Italy, Ireland, Belgium, Slovenia, and Cyprus are currently on a negative ratings watch according to the agency.
Oil Steady in Early Monday Trading
Crude oil futures were relatively unchanged by midday Monday at $93.36 per barrel. The price of gold per ounce was down $6.00 to $1,591 while silver was trading at $28.83 – a daily drop of $0.86 per ounce. As long as the U.S. Dollar remains strong, many experts believe a spike in commodities such as oil and precious metals is unlikely.
Be sure to check back after today’s market close for our stock market daily recap here at IRA.com News.