Midday Market Update: Stocks, ETFs Slide on Renewed Dubai and Greece Worries
December 8th at 10:00am by Tom Lydon
Stocks and exchange traded funds (ETFs) slid right from the opening bell this morning. The drop occurred as downgrades from credit rating agencies sparked renewed concerns over Dubai and Greece.
Moody’s cut its ratings on a raft of Dubai Government-controlled companies, citing a lack of government support over the Emirate’s debt obligations, reports Donna Kardos Yesalavich for The Wall Street Journal. In addition, Fitch lowered its credit rating on Greece from A- to BBB+ citing “concerns over the medium-term outlook for public finances given the weak credibility of fiscal institutions and the policy framework in Greece.” Many global ETFs took this news hard and opened solidly lower. (For more stories on global ETFs, please visit our global ETFs category).
The cut by Fitch in Greece’s credit rating is the first time in 10 years that a major ratings agency has put Greece below an A grade. This downgrade has intensified selling pressure on the euro, reports Nick Olivari and Jessica Mortimer for Reuters. An unexpected monthly decline in German industrial production also weighed on the euro. (For more stories on the euro, please visit our euro category).
Specifically, the Rydex CurrencyShares Euro Currency Trust (NYSE: FXE) is down more than 0.5% today. (For more on currency ETFs, please see our currency ETFs category).
President Barack Obama spelled out a new jobs creation initiative, but didn’t attach a price tag. The package will include spending on highway, bridges and other infrastructure projects, tax breaks for small businesses and incentives to encourage Americans to be more energy efficient in their homes, reports Philip Elliott for the Associated Press.
McDonald’s (NYSE: MCD) stock fell the most in four months this morning after global November sales showed the smallest monthly gain in at least five years, reported Courtney Dentch for Bloomberg. The restaurant chain is facing tough comparisons from a year ago when they posted worldwide sales gains of 7.7%, led by a 13.2% sales increase in Asia, Africa and the Middle East. McDonald’s is about 5% of the PowerShares Dynamic Leisure & Entertainment Portfolio (NYSE: PEJ). (For more stories on sector ETFs, please visit our sector ETFs category).
Tony D’Altorio contributed to this article.
