Shares on Wall Street have ended sharply lower overnight, with The Dow Jones Industrial Average falling 1.1%, S&P 500 Index down 1.6% and the Nasdaq Composite Index sliding a whopping 2%.
The news – as usual these days – was all about Europe, with Greece's Finance minister resigning because of ill-health and Spain becoming the fourth state to officially request help for its banks. Rating agency Moody's subsequently downgraded the ratings of 28 Spanish banks.
Legendary investor, George Soros, has suggested failure at the European summit later this week could be fatal to the Euro.
In commodities news, spot gold was up 0.8% to US$1,583.99 an ounce, with oil, silver and copper up slightly.
The Australian dollar was trading at parity this morning, having fallen below US$1 overnight.
A gloomy day ahead
The ASX SPI futures are down 34 points this morning, suggesting the ASX market could fall by around 0.8%. It could be another bumpy day for the S&P / ASX 200 (Index: ^AXJO) (ASX: XJO).
Market losses are likely to be compounded by tax loss selling as we approach the end of the financial year and low volumes due to the looming school holidays.
Billabong International Limited (ASX: BBG) founder and major shareholder, Gordon Merchant, has said that he would now consider another lower bid for the company, and felt "bad" for rejecting a $4 bid just four months ago. Institutional shareholders have called for his removal from the board. Billabong's shares hit an all-time low yesterday, falling to 96 cents.
Fairfax Media Limited (ASX: FXJ) is likely to be in the news again, either because of fallout from the resignation yesterday of three senior editors as the stock price hit new lows, or Gina Rinehart's push to grab at least one board seat. The Australian Financial Review has reported that Ms Rinehart has threatened to sell her 18.7% stake, if the stalemate between her and the board persists.
Kerry Stokes' is reportedly planning his own bid for Consolidated Media Holdings Limited (ASX: CMJ), through his Seven Group Holdings Ltd (ASX: SVW), which won't impress News Corp (ASX: NWS, ASX: NWSLV) much.
Foolish take-away
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Motley Fool contributor Mike King doesn't own shares in any companies mentioned. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
