Stock Market Watch

Dismal Quarter for Global Equity Markets Ends

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The third quarter of 2011 turned out to be dismal for global equity markets as worries about the euro zone debt crisis and a double dip recession weighed down investors’ sentiment.

In the U.S., all three major indexes fell sharply in the third quarter. The Dow Jones fell 12.09% in the quarter, the S&P 500 fell 14.33% in the quarter and the Nasdaq fell 12.91% in the quarter.


In Europe, things were even worse for equity markets as the euro zone crisis escalated. The Euro Stoxx 50 fell 23.48% in the quarter. The FTSE 100 Index fell 14.38% in the quarter, while the CAC 40 Index fell 25.59% in the quarter. In Asia, the Nikkei 225 Index fell 11.37% in the third quarter, while the Hang Seng Index fell 21.46% in the quarter.

The major reason behind the sell-off in the equity markets was the escalation of the euro zone debt crisis. Concerns mounted during the third quarter as European policymakers failed to deliver a concrete plan on solving the euro zone debt crisis. It was only towards the end of the quarter that European leaders showed more will to tackle crisis. However, heading into the fourth quarter, investors are expected to remain jittery due to the possibility of a Greek default and the state of European banks.

Third quarter also saw the U.S. lose its triple-A credit rating. Standard & Poor’s cut U.S. debt rating one notch. The rating downgrade came following the debt ceiling deadlock in Washington DC.

Meanwhile, a slowdown in the global economy and fears of a double dip recession in euro zone and U.S. also dragged down investors’ sentiment.

Bank of America Corporation (NYSE: BAC) shares were among the worst performers during the third quarter, falling 44.16%. Goldman Sachs Group Inc. (NYSE: GS) shares fell 28.96% during the quarter. Apple Inc. (NASDAQ: AAPL) rose 13.6% in the third quarter.

 

edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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