Stocks continued to fall on Wednesday as renewed fears over the European sovereign debt crisis fueled a return to risk aversion. Commodities followed equities down the drain, with gold and oil in the red. Amazon, however, was the day’s darling, rallying on CEO Jeff Bezos’ announcement of its new Kindle tablet.
After zigzagging through the first half of the day, all three major U.S. equity indices stepped decidedly into negative territory, with decliners outnumbering advancers by a ratio of 4-to-1. The tech-heavy Nasdaq led the decline, down 2.2% to 2,492 points by the time the closing bell rung in New York. The S&P 500 slid 2.1% to 1,151 while the Dow fell 1.6% to 11,011.
Markets continued to grasp at straws, as the European rumor mill dictates sentiment. Ahead of Thursday’s Troika visit to Greece, reports that EU members were divided over the extent of private creditor losses pushed the German DAX and the French CAC40 into the red. The euro weakened against the dollar, trading at $1.3544.
But it was Amazon’s new Kindle that took all the attention. In a Steve Jobs-like presentation, Amazon CEO Jeff Bezos introduced a series of new products including the new Kindle Fire Tablet, as Forbes’ Clare O’Connor reported. (Read Jeff Bezos’ Big Reveal: Amazon Kingpin Shows His Inner Steve Jobs).
Shares in Amazon rallied on the news, indicating positive market reaction to a product that will have to compete with Apple’s iPad, which remains clearly in control of the market. Amazon ended the day up 2.4% or $5.29 to $229.50.
Among the day’s big losers was Alcoa. One of the world’s largest producers of aluminum, Alcoa tanked as the commodity complex continued to break down; its shares traded down 4.9% or 51 cents to $9.97.
Gold fell after having broken a losing streak on Tuesday on strong physical demand. The yellow metal was trading down 1.1% to $1,650 a troy ounce. Crude oil was down as well, with WTI trading down 4.4% to $80.72. (Read Oil Down More Than 12% This Quarter As Service Stocks Price In Recession).
Another stock that can’t catch a break is Bank of America. Litigation troubles continue at the bank headed by Brian Moynihan, as a $50 billion lawsuit has been filed against it on accusations that Bank of America deceived shareholders by hiding massive losses at Merrill Lynch before the acquisition. Shares in the beleaguered bank were down 4% or 26 cents to $6.22