Better-than-expected earnings by Cisco Systems failed to reduce stock market worries concerning the European crisis, the Middle East and the fiscal cliff.
A disappointing report on retail sales and concern about an Israeli air strike in Gaza reduced investor enthusiasm on Wednesday morning as worries outweighed good news. Although a better-than-expected earnings report from Cisco Systems (NASDAQ:CSCO) caused the stock to gain 7.8 percent in pre-market trading, the news was overshadowed by disappointing European economic reports and a Eurozone-wide protest against austerity. Anxiety about the fiscal cliff continued to underlie the other issues of the day that continue worrying the stock market. Chart courtesy of Stockcharts.com
As of 2:40 EST, the Dow Jones Industrial Average sank 109 points (0.86 percent) to 12,646. The S&P 500 Index fell 0.76 percent to 1,364 – staying below its 50-day moving average of 1,431 and its 200-day moving average of 1,381 (NYSEARCA:SPY). As the S&P 500 remains below its 200-day moving average after a triple top (see green bar on chart) there is a serious risk that the index could make a further decline. The Nasdaq Composite declined 0.65 percent to 2,865 (NASDAQ:QQQ). The Russell 2000 Index took a 1.11 percent nosedive to 780 (NYSEARCA:IWM).
The “Dollar Bull” Index ETF (NYSEARCA:UUP) declined by 2 cents (0.09 percent) to 22.19 as of 1:29 EST.
As of 1:20 EST, the S&P 500 Volatility Index – or VIX – advanced 1.86 percent to 16.96. However, the VIX Short-Term Futures ETN made an 0.86 percent decline to 34.55 (NYSEARCA:VXX).
The major European stock market indices made significant declines on Wednesday as a Eurozone-wide protest against austerity accompanied more bad news about the Greek economy. The Euro STOXX 50 Index finished Wednesday’s trading session with a 0.81 percent decline to 2,472 (NYSEARCA:FEZ). The Euro STOXX 50 Index remained below its 50-day moving average of 2,516. The FTSE 100 Index dropped 1.11 percent to 5,722 (NYSEARCA:EWU). The German DAX Index sank 0.94 percent to 7,101 (NYSEARCA:EWG). France’s CAC 40 Index fell 0.89 percent to 3,400 (NYSEARCA:EWQ). Spain’s IBEX 35 Index declined 0.27 percent to 7,673 (NYSEARCA:EWP). Italy’s FTSE MIB Index declined 0.52 percent to 15,252 (NYSEARCA:EWI). Euro Stocks Down into Close as Greek Fears Weigh
As of 1:42 EST, the euro advanced 0.35 percent against the dollar, trading at $1.2749 (NYSEARCA:FXE).
On London’s ICE Futures Europe Exchange, January futures for Brent crude oil advanced by $1.07 (1.00 percent) to $108.41/bbl. (NYSEARCA:BNO, NYSEARCA:USO).