Despite some signs of strength for the U.S. economy, stocks continued to fall on Friday as the Dow tanked another 140 points. Investors, concerned that the Greek debt crisis could spread throughout Europe, sold stocks. If the crisis does spread, that would mean that the Euro, already undermined, could be weakened even more. Things could get worse if other countries, such as Portugal and Spain, require a bailout. Imagine the impact: Europe's banking exposure to Greek debt is around $200 billion but exposure to Spain is around $800 billion.
Not surprising, then, that there was panic on the floor of the New York Stock Exchange on Thursday. Not only were traders and investors evaluating the risks from Europe, but they were also dealing with system failures as traders' handheld devices stopped working, preventing them from receiving information on completed trades and computerized trading systems generated "sell" orders, all contributing to the market's spectacular fall.
David Henderson of DruStocks.com was on the floor and says that it was a day he will not forget. "I was like, wow I haven't seen this in maybe 20 years or so," he says.
Henderson's outlook for the U.S. markets isn't dire (see video). But for now, he says that investors remain "scared, afraid and sitting on their hands" and warns that the psychology of the market is changing.
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