Digital News Report – The Dow Jones Industrial Average (DJIA) fell more than 178 points to 11,897.27 today. Stock prices fell six weeks in a row, and if this week ends lower, it will be the longest duration of declines since March 2001.
Sovereign debt worries have wreaked havoc on stock prices and the common European currency (euro) . U.S. markets opened lower today, but when reports emerged that Greek Prime Minister George Papandreou had resigned, the Dow really started to slide. The rioting in Athens displayed by the media helped put downward pressure on stock prices.
While the European Union discussed a new bailout package for the Hellenic Republic, the turmoil sent Greek bond prices skyrocketing. The 10-year bond yield hit 18 percent; higher than any other European nation. The euro began to sink and European and American stock markets felt the pain. Less than two dozen stocks on the S&P 500 were higher.
There are hard choices that need to be made. Nearly half of the population is employed by or receives money from the government. Germans are calling for austerity measures before they commit to a bailout.
European finance ministers are also looking at ways to enroll private investors in the Greek bailout. Some of the ministers are calling for increased taxes and government cuts. These proposed cuts sent protesters to the streets.
Later Wednesday, Papandreou said he would not step down but would form a coalition government and replace cabinet officers before asking Parliament for a vote of confidence.
Greek media is reporting strikes at the hospitals, ports, banks and state-run companies. Making the situation worse, a socialist ally of Papandreou said he will not support the austerity measures.
By: Tim Edwards