US stocks were driven down at Tuesday’s start with the Dow Jones falling as much as 250 points as Belgium's Dexia become the first Eurozone bank to be bailed out before making a dramatic about turn during the last hour of trade to end up 153 points or 1.4%.
The S&P 500 dropped shortly after the opening bell only to end up 2.25% at 1,124 points, but is still down 18% over the last four months. The resource-heavy TSX composite index were almost at a two-year low before making up some of the lost ground to end down just two-thirds of a percent. Gold could not capitalize on the ongoing volatility and fell further after hours to trade at $1,623/oz. Bullion had briefly dipped below $1,600/oz before noon.
The tech laden Nasdaq Composite Index had the best day and ended almost 3% higher after turning positive around 11:00 am.
The recovery came to late for Europe and major indices in London, Frankfurt and Paris all lost close to 3% after France and Belgium came to the rescue of heavy sovereign debt holder Dexia on Tuesday in the first government bailout of a European bank in the euro-zone debt crisis.
Reuters quotes Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh: "I don't think anyone really believes Greece is not going to default at least on their short-term debt. We're looking for opportunities to buy for holding at reduced prices. The sad fact is that we don't know what tomorrow brings."