Stock Market Gobbles Again

U.S. stock market gobbles again with declines in thin holiday trading on bad news from Italy, Spain, Greece and Belgium

Major U.S. indexes declined yet again to end an ugly week with with S&P 500 SPY declining -0.3%, the Dow Jones Industrials sliding -0.2% and Gold GLD losing -0.9% as bad news from Europe continues to spook investors.

Italy EWI conducted a bond auction that yielded miserable results with six month bonds yielding a record high 6.5% and two year yields to more than 8%, levels that are widely regarded as unsustainable.

Belgium was downgraded by S&P and Spain's stock index EWP was hammered on the news/rumor that the country won't be able to manage its deficit and financing costs as the contagion spreads across Europe to the region's biggest economies.

Finally, Greece was back in the news with new demands that its bondholders take bigger “harcuts” on its debt than previously considered.

 With Europe on the ropes and suffering from political gridlock, global risks continue to multiply and it looks increasingly doubtful that the traditional “Santa Rally” will arrive on schedule.

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