Stocks Moving Sharply Lower On Renewed Europe Concerns

Oxford, MS 9/19/2011 (PennyPayDay) – With traders expressing renewed concerns about the financial situation in Europe, stocks have moved sharply lower in early trading on Monday. The major averages have fallen firmly into negative territory, giving back ground after showing a strong upward move last week.

In the past few minutes, the major averages have seen some further downside, hitting new lows for the young session. The Dow is down 225.39 points or 2 percent at 11,283.70, the Nasdaq is down 54.07 points or 2.1 percent at 2,568.24 and the S&P 500 is down 25.78 points or 2.1 percent at 1,190.23.

The initial weakness on Wall Street comes as worries about the ongoing Greek debt crisis have emerged once again amid indications that the debt-plagued nation could be forced to default.

With officials failing to make progress at a weekend meeting on dealing with Greece's mountain of debt, traders are cashing in on last week's gains.

Traders are also digesting reports that President Barack Obama plans to unveil a proposal calling for $1.5 trillion in tax increases mostly targeting the wealthy as part of an effort to reduce the U.S. deficit.

Steel stocks have shown substantial downward move in early trading, dragging the NYSE Arca Steel Index down by 4.2 percent. The weakness in the steel sector reflects renewed concerns about the outlook for global demand.

Considerable weakness has also emerged among energy stocks, which are moving sharply lower along with the price of crude oil. Networking, banking, and software stocks are also posting notable losses, moving lower along with most of the major sectors amid a broad based sell-off.

Meanwhile, gold stocks are bucking the downward trend by the broader markets amid a significant increase by the price of the precious metal.

In overseas trading, stock markets across the Asia-Pacific region saw considerable weakness on Monday, although the Japanese markets were closed for a public holiday. Hong Kong's Hang Seng Index tumbled by 2.8 percent, while Australia's All Ordinaries Index fell by 1.6 percent.

The major European markets have also come under significant selling pressure on the day. The U.K.'s FTSE 100 Index is falling by 2.1 percent, while the German DAX Index and the French CAC 40 Index are plunging by 3.2 percent and 3.4 percent, respectively.

In the bond market, treasuries are seeing considerable strength amid the sell-off on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 11.5 basis points at 1.961 percent.

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