After a Greek government official said, the country would not pay the IMF on Tuesday, stocks tumbled, with the major indexes falling around two percent. Bobbi Rebell reports.
Stocks spiraled downwards Monday, their worst day of the year so far, on fears of a Greek debt default. The Dow down 350 points, almost two percent. The S&P 500 closing at a three-month low, falling more than two percent. The Nasdaq down almost two and a half percent, it's worst percentage loss since April of 2014. The European Central Bank froze funding to Greek banks, and the Athens stock exchanged closed. Deutsche Bank as well as some U.S. bank stocks like Goldman Sachs and JPMorgan slid. But stocks around the world were under even more pressure than the U.S. markets. Pension Partners chief investment officer Ed Dempsey explains why. SOUNDBITE: EDWARD DEMPSEY, CHIEF INVESTMENT OFFICER, PENSION PARTNERS (ENGLISH) SAYING: "There is a lot of liquidity in the world. The U.S. banks have largely been de-risked of that sort of certainly derivative exposure to Greece. Most of the Greek debt is held by the ECB or its surrogates. And lastly, Greece is not an economic issue. This is not an economic problem. Greece is roughly two percent of euro zone GDP." Greece is also a big destination for Carnival and Royal Caribbean Cruises, so their shares dropped. Also down: Google. The online search company has agreed to use government data to alert Google Maps users of nearly every railroad crossing. The move is aimed at making driving safer. GE struck another deal to shed itself of its financial assets. It'll sell its fleet management business in four countries to Canada's Element Financial for $6.9 billion. Micron Technology's shares extended Friday's plunge. Mizuho downgraded the chip maker's shares to "neutral" from "buy." It says higher costs for DRAM chips will likely worsen the outlook for PCs. Puerto Rico's governor told the New York Times the commonwealth wouldn't be able to pay its debt. That hurt shares of bond insurers MBIA and Assured Guaranty. Good economic news couldn't lift the market. Pending home sales rose to a nine-year high last month. The stock losses in the U.S. were mild compared to the carnage in Europe. Investors dumped financial stocks, wiping out $33 billion in market capitalization.