Markets Don’t Like Greece

Major index and index ETFs declined yesterday on Greek sentiment, as the Greeks and EU postponed meetings of bailout yet again.  The S&P 500 dropped .54%, the Dow Jones Industrial Average declined .76%, the NASDAQ Composite lost .55%, and the Russell 2000 dropped .81%. 

Major index ETFs dropped too as the SPDR S&P 500 ETF (NYSEARCA:SPY) dropped .47%, the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) dropped .62%, the PowerShares QQQ Trust Series 1 ETF (NASDAQ:QQQ) lost .70%, and the iShares Russell 2000 ETF (NYSEARCA:IWM) lost .83%.

Indexes and Index ETFs likely lost it again as the EU and Greece postponed talks to initiate any bailout money until next Monday; yesterday the EU was scheduled to vote on the austerity deal proposed by the Greeks earlier this week, however apparently the Greek deal was not quite good enough.  February is a short month and the Greeks seem to be running out of time before a possible default in March.  Greece has appeared to bend over backwards to achieve the types of austerity that the EU demands, it also appears that the EU is still very wary of a 2nd bailout for such a small country.  How much longer the Greeks put up with this see-saw politics is still an unknown.

Apple Computers (NASDAQ:AAPL) also made headlines yesterday with its 2.31% drop; I always maintain that what goes up must come down eventually, and a $500 Apple stock will likely take some time to become sustainable. 

Iran also decided to stoke the fires again yesterday, as the oil rich country boasted its progress on its nuclear program, despite continued international sanctions.  It appears that Iran, at least for now, is willing to go down fighting, if indeed circumstances play out in the direction of brinkmanship and possible war.  Naturally, commodity prices spiked in reaction to Iran’s noise.

Yesterday’s economic news at home was at least positive, however, as the Home builders index saw improvement and the Empire State Index and capacity utilization were mixed.  In other news, the VIX saw a huge spike as fear filled the markets again, naturally, as Greece might be reaching the end of the road.

Bottom Line:  Markets and ETFs definitely were spooked by Greece yesterday as the European soap opera continues to drag on and on.  I can probably say that this entire story must be wearing thin for Europe, the Grecian government, and Greek citizens.  Meanwhile, we can be assured at home that the economy is still growing slowly, at least for now.

Disclaimer: Wall Street Sector Selector trades a wide variety of ETFs and positions can change at any time.