Budding optimism this week for solutions to the European debt crisis ground to a halt Thursday as the head of the European Central Bank gave a pessimistic outlook for tomorrow�s Brussels meeting, killing the market�s three-day climb and sending bank shareholders to the exits.
While the ECB dropped interest rates to an all-time low 1% and said it would open up three-year loans to euro zone banks, negative comments about the low possibility of lending to the International Monetary Fund — which then would lend the money to euro zone members in a form of quantitative easing — soured the markets. The Dow Jones tumbled nearly 200 points by day�s end.
European financials like Royal Bank of Scotland (NYSE:RBS, -7.93%) and Deutsche Bank (NYSE:DB, -7.76%) were torched, as was U.S.-based Morgan Stanley (NYSE:MS, -8.42%), which is thought to have significant exposure to a European debt crisis. The fallout also trickled down to national banking giants Citigroup (NYSE:C, -6.97%), JPMorgan Chase (NYSE:JPM, -5.24%) and Bank of America (NYSE:BAC, -5.09%).
Electric vehicle maker Tesla Motors (NASDAQ:TSLA) had more than enough problems without the general market sentiment Thursday, with TSLA stock plunging almost 10% to $30.89 after Morgan Stanley�s Adam Jonas hacked his price target by 37% and downgraded Tesla to underweight. Jonas expressed satisfaction with Tesla�s performance, with the pessimism instead focused toward the entire electric vehicle industry.
On the opposite side of the spectrum, Affymax (NASDAQ:AFFY) — whose stock suffered through a roller-coaster ride earlier this week hinging on the fate of its experimental anemia medicine, peginesatide — spiked Thursday on news that advisers to the Food and Drug Administration would back its drug.
During the day, Affymax stock almost reached $8.50, its highest point since June 2010, when AFFY shares took a 70% hit after the company�s trial anemia drug — then called Hematide — was reported to have greater cardiovascular risks than an existing Amgen (NASDAQ:AMGN) product. Affymax stock finished Thursday at $7.99, up 36%.
Three Up- DemandTec (NASDAQ:DMAN): Up 55.99% ($4.72) to $13.15.
- Coinstar (NASDAQ:CSTR): Up 7.84% ($3.45) to $47.45.
- Sodastream International (NASDAQ:SODA): Up 2.36% (83 cents) to ($35.96).
- Melco Crown Entertainment (NASDAQ:MPEL): Down 6.7% (65 cents) to $9.05.
- Nokia (NYSE:NOK): Down 6.19% (33 cents) to $5.
- Juniper Networks (NASDAQ:JNPR): Down 5.91% ($1.26) to $20.05.
As of this writing, Kyle Woodley did not hold a position in any of the aforementioned stocks. Check out our list of previous IP Market Recaps.
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