Worry, worry, worry!
The Standard & Poor’s 500 Index declined 1.8 percent at 11:04 a.m. in New York and the Stoxx Europe 600 Index slumped 3.1 percent. Crude oil retreated 2.3 percent and copper dropped 3.1 percent as the euro weakened to near $1.24, a level not seen since November 2008. The yield on the 10-year German bund decreased 8 basis points, while the 10-year Treasury yield lost 10 basis points to 3.43 percent. The cost of insuring against a default by Greece rose and gold slipped from a record.
Deutsche Bank AG Chief Executive Officer Josef Ackermann said Greece may not be able to repay its debt in full, and former Federal Reserve Chairman Paul Volcker said he’s concerned the euro area may break up. Sony Corp., the world’s second- largest maker of consumer electronics, said it may suffer a “significant impact” if Europe’s deficit spreads, while Chinese Premier Wen Jiabao said the foundations for a worldwide recovery aren’t “solid” as the sovereign-debt crisis deepens.
“It’s a classic risk-off trading day,” said Win Thin, senior currency strategist at Brown Brothers Harriman & Co. in New York. “Commodities are down, stocks are down, emerging markets are down. Europe still has problems. The euro breakup is not a base-case scenario, but I have to acknowledge that everyone else is talking about it. There’s concern that if Europe implodes, the global recovery is jeopardized.”
