Investor, Europe Debt Crisis | featured news

Stocks rallied Monday as investors bet that European finance ministers would take action soon to prop up the region's unstable economies.

Investors in Asia continued to sell off risky assets like stocks on Monday, as Europe's prolonged debt crisis and the possibility of a global recession caused investors to flee riskier assets like stocks.

The price of gold streaked past $1,700 an ounce for the first time Monday. Investors, beset by worries about the U.S. debt downgrade, Europe's financial crisis and slowing global growth, sought safety in the metal as stocks tumbled around the world.

Investors fled Wall Street in the worst stock-market selloff since the middle of the financial crisis in early 2009 in what has turned into a full-fledged correction. The Dow and the S&P tumbled more than 4 percent on Thursday and the Nasdaq lost 5 percent on fear the United States is staring at another recession and that Europe's sovereign debt crisis is swallowing two of its largest economies.

If we did not find ourselves smack in the middle of the Holiday season, I’d probably be talking about how the bull camp’s momentum appears to be waning and that we should be bracing for a meaningful pullback in response to the tiring trend, the overbought condition, and the overly optimistic sentiment readings. And while these issues are indeed present, it appears that the holiday spirit and the corresponding portfolio allocations may be the primary driver to what I will loosely term the current trend.

The move by Standard & Poor’s on Tuesday deepened Europe’s debt crisis, and investors sold off government bonds amid fears of a default.