Greek Referendum Pushes Stocks Down late Tuesday

Nov 2, 2011, 10:14 by R.E. Christian

U.S. stocks tumbled Tuesday as investors absorbed news that Greece would put its international rescue package up to a public vote.

"Let us allow the people to have the last word, let them decide on the country's fate," Greek Prime Minister George Papandreou said in a stunning announcement that could pull the rug out from under months of international negotiations.

"The command of the Greek people will bind us. Do they want to adopt the new deal, or reject it? If the Greek people do not want it, it will not be adopted," Papandreou said of the $180 billion in loans earmarked for Greece that the heads of state of 27 European Union countries announced Thursday.

With the stunning announcement, "The market is rapidly running out of confidence that Greece will get its house in order, pronto," Peter Kenny, managing director at Knight Capital Group, told The Wall Street Journal.

Stocks fell hard in Asia and harder in Europe. In Hong Kong, the Hang Seng index shed 2.49 percent. In India, stocks dropped 1.27 percent.

In Germany, stocks on the DAX index gave up 4.9 percent. Stocks were down 5.3 percent on the CAC index in France and 6.8 percent in the FTSE MIB index in Italy.

By close of trading on Wall Street, the Dow Jones industrial average, which lost 2.2 percent Monday, dropped another 2.48 percent, losing 297.05 points to 11,657.96. The Standard & Poor's index, down 2.4 percent Monday, shed 2.79 percent, 35.02 points, to 1,218.28. The Nasdaq composite index of tech-dominated stock lost 2.89 percent, 77.45 points, to 2,606.96.

On the New York Stock Exchange, 446 stocks advanced and 2,614 declined on a volume of 5.4 billion shares traded.

The benchmark 10-year treasury note rose 1 5/32 to yield 1.984 percent.

The euro fell to $1.3702 from Monday's $1.3859. The dollar rose to 78.32 yen from Monday's 78.17 yen.

In Tokyo, the Nikkei 225 index lost 1.7 percent, 152.87, to 8,835.52.

In London, the FTSE 100 index lost 2.21 percent, 122.65, to 5,421.57.

Source: UPI