The stock markets in the United States declined again today as investors worry about the standoff between Greece and its creditors. The standoff ignited fears that Greece might be compelled to exit the European single-currency union since its economy is close to a default.
The markets started the trading session downward after the government of Greece announced its plans abandon some of the debt-reduction and economic reform measures—the primary conditions under the international bailout program.
Former U.S. Federal Reserve Chairman, Alan Greenspan recently commented that the latest effort of the new government of Greece to renegotiate the terms of its economic bailout will be possibly resolved only if it will exit the Eurozone.
“I believe [Greece] will eventually leave. I don’t think it helps them or the rest of the Eurozone. It is just a matter of time before everyone recognizes that parting is the best strategy,” said Greenspan in a recent interview with BBC.
Market observers are worried that the standoff could further hurt the economic growth of the European region, and it might result to other countries in the region to cancel their bailout pledges.
Michael Farr, president of Farr, Miller & Washington told the Wall Street Journal,“As an example and as a precedent, Greece matters a ton. It’s important and it’s putting a strain clearly on markets.”
Farr added that stocks remain high at high valuations and it still difficult for investors to find cheap equities despite the recent decline. He said, “We’re still looking. It’s harder to find investments that we think are compelling and reasonably priced. That’s never a good sign. Five years ago or six years ago, I could buy anything.”
- Dow Jones Industrial Average (DJIA) – 17,729.15 (-0.53%)
- S&P 500- 2,046.71 (-0.43%)
- NASDAQ- 4,726.01 (-0.39%)
- Russell 2000- 1,208.71 (+1.45%)
- EURO STOXX 50 Price EUR- 3,347.75 (-1.48%)
- FTSE 100 Index- 6,837.15 (-0.24%)
- Deutsche Borse AG German Stock Index DAX- 10,663.51 (-1.69%)
- Nikkei 225- 17,711.93 (+0.36%)
- Hong Kong Hang Seng Index- 24,521.00 (-0.64%)
- Shanghai Shenzhen CSI 300 Index- 3,345.92 (+1.01%)
Stocks in Focus
Alcoa declined more than 5% to $15.65 per share after analysts at JPMorgan Chase downgraded their rating to Neutral due to concerns that the fundamentals in aluminum are deteriorating.
The stock price of Athenahealth dropped more than 6% to $136.28 per shares. Brokerage firms covering the stock have an average Hold rating with a 12-month average price target of $159.47 per share.
The shares of Transocean gained more than 10% to $20.44 per share after the Organization of Petroleum Exporting Countries increased its 2015 forecast. The organization forecasted that the demand for crude oil will rise to an average of approximately 29.21 million barrels per day (bpd) this year.