Wall Street caught the Euro bug and weakened today as investors grew anxious now that the grand scheme to stem Europe’s debt crisis hinges on the say so of Greece—the first country to feel the sting of the current troubles.
The S&P Retail Index slipped 1.3 percent, or 6.73 points, to 527.80 and the Dow Jones Industrial Average declined 2.5 percent, or 297.05 points, to 11,657.96. The retail decliners covered the spectrum with Guess Inc., down 4.4 percent to $31.53; Target Corp., off 3.9 percent to $52.61, and Tiffany & Co. down 3.3 percent to $77.08.
But the declines were steeper in Europe. Milan’s FTSE MIB tumbled 6.8 percent, followed by Paris’ CAC 40, which fell 5.4 percent. Frankfurt’s DAX closed down 5 percent while London’s FTSE 100 made a modest recovery during the day, but closed down 2.2 percent.
The region’s biggest decliners included Aeffe, which tumbled 7.5 percent; Hugo Boss, which retreated 7.1 percent; Compagnie Financiere Richemont, which sank 5.8 percent; French Connection, which closed down 6 percent, and Tod’s, which fell 6.2 percent.
In Asia, Hong Kong’s Hang Seng Index fell 2.5 percent and Tokyo’s Nikkei 225 fell 1.7 percent.
Markets started their day down after Greece unexpectedly said late Monday that it plans to hold a referendum to approve the latest European Union bailout plan. If the Greeks scupper the long-awaited rescue plan, it will likely lead to a Greek default, which could then cause debt problems in the rest of the region.
Meanwhile, Britain’s Office for National Statistics said that the British economy grew by just 0.5 percent in the third quarter—not enough to spur a recovery and well below British Chancellor George Osborne’s targets.
In the U.S., investors were digesting the downfall of former New Jersey Gov. Jon Corzine’s brokerage firm MF Global, which placed bets on European government bonds, particularly those from the most-troubled countries including Italy, Spain, Ireland, and Portugal.