Stock indexes plagued by Eurozone worries


Market Snapshot for December 5, 2011 (3:10 a.m. ET, Dec.6 ):
Closing Prices: DOW 12,097.83 (+78.41, +0.65%), S&P 500 1,257.08 (+12.80, +1.03%), NASDAQ 2,655.76 (+28.82, +1.1%), Nikkei 225 8,575.16 (-120.82, -1.39%), DAX 6,025.19 (-80.90, -1.32%), FTSE 5,543.99 (-23.97, -0.43%)
OIL 100.59, GOLD 1,719.60, SILVER 32.105
EURO 1.3366, YEN 77.75, BRITISH POUND 1.5634, U.S. DOLLAR INDEX 78.885

Rally Crushed Monday by Threat of S&P Ratings Cuts Throughout EU

After strong rallies last week, the market was hit with a blow on Monday after Standard & Poor's placed the credit ratings of more than a dozen European nations on "credit watch negative" for a potential downgrade. The credit watch included all 15 of the euro-zones remaining countries. Portugal and Greece had already been downgraded to junk status.

The market was already skating on thin ice as Monday's session began. The indices struck strong price resistance from last month's highs late last week after a sharp rally, leaving them still extended on the intraday time frames heading into the new week. As Monday's session began, we were already on the look-out for the possibility of a pullback. At first, however, the indices began their correction through time, falling into a trading range that lasted throughout the morning and into the early afternoon with the indices holding resistance heading into the 10:45 ET correction period. Then came the S&P news and stock prices plummeted.

(Note: The S&P went further on Tuesday morning by announcing that it was also placing the European Financial Stability Facility (EFSF) on negative watch.)

Dow Jones Industrial Average (Figure 1)

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