Manufacturing index dropped to 50.8 in October, down from 51.6 in September, a sign of slowdown, according to the Institute for Supply Management. Any reading above 50 indicates expansion. The manufacturing sector has grown for 27 straight months, according to the index.
The Greek government shocked financial markets with news that it would put its unpopular cost-cutting plan to a public vote. If it’s defeated, the country could drop the European currency and default on its debt, which would put the European banking system and regional economies at risk of another crisis.
Banks stocks fell hard as investors worried about how exposed U.S. banks are if Greece goes through a disorderly default on its debt.
A U.S. securities firm MF Global Holdings Ltd. became the first big casualty of the European debt crisis on Wall Street. It filed for bankruptcy after concerns about the company’s holdings of European government bonds caused its business partners to pull back from the firm and ratings agencies to downgrade its debt.
Credit Suisse Group AG,
Switzerland’s second-largest bank, fell 9 percent after reported profits that fell short of expectations. The bank also announced plans to retrench 1,500 people from its payroll.
LCF on Personal Finance: Any time you got these phrases put together in one day, you know it is a bad omen – bankruptcy, retrenchment, default on debts & manufacturing slowdown. Volatility is rising again. Protect your investment portfolio, whatever they may be.