Greece default fears are dragging down the U.S. stock market.
May 9, 2012– Stock futures in the U.S. dropped sharply Wednesday morning. Traders have responded to the continued uncertainty in Greece after a political battle took place that could affect the entire eurozone.
The Dow futures as of 8:00 am ET were down 75 points, S&P 500 futures were off 10 points and Nasdaq futures slid 19 points. The political turmoil in Greece continued on Wednesday, as the New Democracy Party could not agree with other parties to form a coalition government, even though they hold the majority of seats in Parliament.
Now the attempt to form a coalition will be left to the Syriza Party on Wednesday. If leadership in the Greek Parliament cannot form a united government, the country can hold new elections in June. It is worrisome for the region that any new government that is formed may not agree with austerity packages that need to be put into place to receive a bailout from the International Monetary Fund and the European Union.
Regardless of the outcome, investors in the markets are uncertain about the fate of the country in the eurozone. If Greek leaves the zone, the consequences of its departure are uncertain, but it could shake up the other weaker countries.
Spain is of great concern to region leaders as it has high debt and a number of fragile banks.