Italian Bond Market Sinks U.S. Stocks

The market is down sharply this morning on the news of a seriously freaked out bond market in Italy. If the bond market ain’t happy, ain’t nobody happy.

Ten-year bonds are now paying more than 7% which is the highest since the euro came along. This comes after Prime Minister Silvio Berlusconi said he would step down after a budget deal was reached. Initially, markets rallied on the news. (Note to self: It’s usually not a good sign when the news of your departure sparks a rally.) So where are folks seeking shelter? You guessed it—U.S. Treasury bonds.

Our 10-year note is now back below 2%. There’s going to be a big auction of 19-years by the Treasury later today. Yesterday’s three-year auction had some pretty intense demand.

Shares of General Motors ($GM) are lower after the company said that its third-quarter profits dropped 15% from one year ago. This is the company’s seventh-straight profitable quarter and they topped expectations. GM is taking a bath in Europe and they said they don’t expect to break even this year in Europe.

It’s still early, but the S&P 500 has been as low as 1,240.99 which is a drop of 2.74%.

Posted by on November 9th, 2011 at 9:57 am


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