Europe assets sell heavily on sovereign debt concerns

 @ibtimes on February 04 2010 11:48 AM

Nearly all Europe-related stocks, bonds and exchange traded funds are selling heavily during the morning New York session. 

European banks continued to fall sharply while U.S. banks fared better.  U.K. banks are the steepest decliners.  Barclays (NYSE:BCS) plunged 9.03 percent at 11:44 a.m. EST, HSBC (NYSE:HBC) is down 5.11 percent, and Royal Bank of Scotland (NYSE:RBS) is down 5.85 percent.

Although the U.K. government left interest rates unchanged today, it decided to pause its $317 billion bond-purchase program.

Deutsche Bank (NYSE:DB) is down 6.12 percent and UBS (NYSE:UBS) is down 5.72 percent.  U.S. banks such as Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), and JPMorgan (NYSE:JPM) are down no more 4.14 percent as of 11:46 a.m. EST.

The National Bank of Greece (NYSE:NBG) plunged 6.52 percent. 

Nearly all Exchange Traded Funds (ETFs) designed to track European stocks declined.  iShares MSCI United Kingdom Index (NYSE:EWU) dropped 3.31 percent and the iShares MSCI Germany Index Fund (NYSE:EWG)  dropped 3.61 percent. 

The iShares MSCI Spain Index (NYSE:EWP) plunged, losing 7.46 percent and the iShares MSCI Italy Index (NYSE:EWI) dropped 5.10 percent. 

Both the German DAX and the UK FTSE 100 Index are down more than 2.25 percent. 

Spain, along with Portugal, is under scrutiny as fears of sovereign debt spread in Europe.  Stocks and bonds in Greece, Portugal, and Spain fell today.   The spreads of credit-default swaps on government debt of Portugal, Greece, Spain, and Italy also widened.

Commodities firms are also falling as the dollar surges against the euro.  British commodities giant BHP Billiton (NYSE:BHP) is down 4.86 percent and metals giant Rio Tinto (NYSE:RTP) is down 5.26 percent.

The euro continued to drop against the dollar and yen.  From the opening of the London session, it dropped around 211 pips against the yen and 85 pips against the dollar.

The euro gained versus high yielding commodities currencies as risk aversion sets in; it gained around 120 pips against the Australian dollar.

The U.S. stock market has plunged today.  In addition to European debt worries, a disappointing unemployment claims report was released this morning. 

The S&P 500 Index is down 27.57 points, or 2.51 percent, trading at 1,069.71 and the Dow Jones Industrial Average is down 2.14 percent to trade at 10,050.40.

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