Wall Street Loses Significantly for the First Time in 2012

On Tuesday, the Dow dropped 1.57%, its first significant loss in 2012. While it was widely expected by analysts that the huge gains to start 2012 would slow down because stocks were overbought, the true culprit was Greece. Fears of a possible default in Greece brought the market to a halt, lowering the three major indices by over one percent each. A Greek default could cause over one trillion euros of damage to Europe. In addition to Greece, both China and Brazil showed slowing growth that added to the fears of the global economy. Because of these global issues, the dollar gained and the euro/dollar dropped to 1.3115. The last time the Dow dropped over 200 points was on November 23, ending a run of over three months without a major loss. Also, the S&P 500 dropped over one percent for the first time since December. The markets have started off hot in 2012, but fears in Europe and in the global economy as a whole finally took precedence over Wall Street optimism. Only time will tell if this is just a minor pullback or if Wall Street has major worries that lie ahead.

Michael Felicetta


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