Stocks slid to weekly losses after a rating agency warning on Europe shred investor’s optimism after a confidence vote in Italy. Fitch Ratings affirmed France’s top Triple-A credit rating, but warned of a potential downgrade for six other euro-using nations, placing Belgium, Spain, Slovenia, Italy, Ireland and Cyprus under review, calling a broad solution to Europe’s debt crisis “technically and politically beyond reach.” Also, U.S. consumer prices held flat in November as gas costs fell, while core prices climbed 0.2%. Tech stocks closed with broad gains, but declines of Zynga Inc. and Research In Motion commanded investors’ attention through the day. Zynga lost 5%, closing below the stock’s IPO price of $10 a share. RIM fell more than 11% in the wake of the company’s disappointing earnings results and forecast. We expect the volatile week ahead, as investors remain worried about the debt crisis in Europe. Also, low trading volumes ahead of the holidays tends to exaggerate swings in the market. Implied volatility inched lower on massive trading volumes.
Monday, December 19, 2011
Volatile week ahead
Stocks slid to weekly losses after a rating agency warning on Europe shred investor’s optimism after a confidence vote in Italy. Fitch Ratings affirmed France’s top Triple-A credit rating, but warned of a potential downgrade for six other euro-using nations, placing Belgium, Spain, Slovenia, Italy, Ireland and Cyprus under review, calling a broad solution to Europe’s debt crisis “technically and politically beyond reach.” Also, U.S. consumer prices held flat in November as gas costs fell, while core prices climbed 0.2%. Tech stocks closed with broad gains, but declines of Zynga Inc. and Research In Motion commanded investors’ attention through the day. Zynga lost 5%, closing below the stock’s IPO price of $10 a share. RIM fell more than 11% in the wake of the company’s disappointing earnings results and forecast. We expect the volatile week ahead, as investors remain worried about the debt crisis in Europe. Also, low trading volumes ahead of the holidays tends to exaggerate swings in the market. Implied volatility inched lower on massive trading volumes.
