Sunday, August 21, 2011

Stocks: Fear Takes Center Stage

Ken Sweet


Nervous investors hoping for a reprieve this week will be disappointed……, The past month has been nothing but a disaster for stock market investors. The S&P posted its biggest four-week loss since March 2009. Meanwhile, safe haven plays like gold and U.S. treasuries have soared, with gold hitting a new record high day after day…..

This week will be fairly quiet as far as scheduled economic and company events, but fears about the U.S. possibly heading into another recession and the financial crisis in Europe are expected to weigh heavily on trading…..

"What's worrying the markets are the perception that there isn't much more that can be done by the Fed and politicians," said Rob Lutts, chief investment officer with Cabot Money Management. "All three -- the White House, the Fed, and Congress - are in a bind that I have never seen before."

Europe's financial situation is a mess, it's getting worse, and Wall Street has zero confidence that politicians will be able to fix it. Those fears have spilled over into the region's banking sector, where rumors that European banks are having trouble getting financing are stirring up ugly memories of the weeks leading up to Lehman Brothers' collapse. Many believe a default is inevitable."Europe is at a very pivotal point right now [as far as] deciding the fate of the whole euro zone,"……

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