The Dow ended in the red for the sixth day in a row on Wednesday as traders fretted about the deteriorating situation in Spain, Greece and other eurozone nations that are still in the grips of the debt crisis.
The Dow Jones Industrial Average, as quoted by Foxbusiness.com, fell 97 points, or 0.75%, to 12835, the S&P 500 slid 9.1 points, or 0.67%, to 1355 and the Nasdaq Composite dipped 11.6 points, or 0.39%, to 2935.
Many sectors recovered markedly from session lows; indeed, the utility sector was in the green. The Dow had been down slightly less than 184 points at the lows of the day.
The situation in Europe remained quite fluid. The European Financial Stability Fund decided to provide Greece with the 4.2 billion euro aid tranche it needs this month, but will hold back on 1 billion euro until next month, according to reporting by the Wall Street Journal, citing a statement. That helped allay fears that Greece will imminently miss a debt payment.
Still, the various parties in parliament remained unable to forge a coalition government. If Greek leadership fails to form a unity government, new elections may have to be held in June. It is also possible that any new government may not be friendly to austerity measures that are needed to receive rescue funds from the European Union and International Monetary Fund.
In either case, it has left market participants uncertain of Greece's fate in the eurozone. Analysts have said that the consequences of a Greek exit are unclear and that it may reverberate through other, weaker nations.
Spain has been of particular concern because of its fragile banking sector, high public debt, and painful borrowing costs. Indeed, The Bank of Spain said it received a request from Bankia, the country's fourth-biggest bank, for a partial takeover and 4.5 billion euro in loans to shore up its capital base.
Negative sentiments of European nations's post election last week may shadow the regional stock markets, including Jakarta Composite Index (JCI). Today, the JCI may move in mixed with decline possibility within the range of 4,100-4,150.
Today, the JCI may test the support 2 level of 4,040 and the resistance 1 level of 4,180 and the resistance 2 of 4,232. Several stocks to watch: JPFA, TLKM, and DGIK.
Minna Padi Investama:
The JCI may try to stay above the support level of 4,109. Wait and see is the choice until rebound sign arrives. Several stocks to monitor: BMTR, BHIT, and BBRI.
Technically, the index may move in mixed with decline possibility. The move may range within 4,105-4,167. Several stocks for day trading: JPFA, INTP, KLBF, and TBIG.
Disclosure: No position at the stock mentioned above.