The equities market and stock exchange traded funds (ETFs) fell sharply Wednesday, erasing most of the month-to-date gains, as the Eurozone’s financial problems were brought into the limelight, once again.
Equities quickly fell after German Chancellor Angela Merkel’s party wanted to allow European members to exit the Union, reports Rita Nazareth for Bloomberg.
“It’s just like a scary movie as it never ends,” Keith Wirtz, chief investment officer at Fifth Third Asset Management, said in the Bloomberg report. “The overarching problem is that most of the economies in Europe can’t sustain the size of their governments. We’re going to have this headache for a long time to come.”
“The Greek flu is hitting Italy,” James McDonald, chief investment strategist at Northern Trust Corp., said. “Until they know the new leadership’s willingness to implement reforms, they are going to require higher compensation through higher yields on Italian bonds. The risk is that this feeds on itself.”
The financial sector led the market lower as investors grew anxious over the the level of European debt banks were exposed to. J.P. Morgan Chase (NYSE: JPM) down 6.34% at last check Wednesday, Bank of America (NYSE: BAC) declining 4.82% and Morgan Stanley (NYSE: MS) falling 8.31%. The Financial Select Sector SPDR (NSYEArca: XLF) was down 4.89%.
SPDR S&P 500
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Max Chen contributed to this article.