Stocks start the week in a sharp decline as investors
worry about Greece’s potential exit from the euro-zone and Spanish and Italian
bond yields jump. The Dow opened with
triple digits declines as the major headlines surrounded Europe and the
inability of Greece to structure its government. In Europe, the Stoxx 600 shed 2% led by bank
stocks as investors weighed the drama in Greece. Spanish and Italian bond yields rose 24 and
32 basis points respectively as debt concerns continued in Europe. Commodities were hit hard, with oil
continuing its decline, dropping 1.8% in early trading. The price of oil has dropped considerably
over the past couple weeks being led by demand concerns and weak economic
data. Monday’s drop came after Saudi
Arabia’s oil minister said the European benchmark Brent crude should be trading
at $100 per barrel. WTI crude was down 1.68% to 94.51. Gold continues its
retreat after hitting its 2012 low on Friday.
Investors continue to flock to the safety of the US dollar as concerns
over Europe remain. A stronger greenback
tends to drag down dollar-priced commodities, including gold. Gold prices fell 1.41% to 1562 on
Monday. The US dollar strengthened and
the 10 yr. treasury yield fell 6 basis points to 1.78%. The 30 yr. mortgage rate fell to 3.76%. The CBOE volatility index (VIX) was up 5.98%
to 21.08.
