Europe Weighs Heavy on the Market

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

After a strong showing on Tuesday, markets worldwide faded early in intraday trading Wednesday morning. The Dow Jones (INDEX: ^DJI  ) is down 0.5% while the Nasdaq Composite (INDEX: ^IXIC  ) is down about 1.75%.

So what happened?
The European Central Bank decided to dish out almost $650 billion in funds to try to ease fears of a credit crunch that could take the already vulnerable eurozone to an even worse place. The ECB handed out three-year loans -- the longest maturity on record -- to over 500 banks in Europe. This was easily the most aggressive refinancing operation the ECB has undertaken, in what should be a signal of the seriousness with which the ECB plans to assist credit-hungry banks.

However, markets and analysts alike weren't buying it. Extremely strong demand for the funds illustrated to the markets that banks are now turning more and more toward the ECB as tensions rise and lending has become more and more tight. The ECB is hoping the cash will trickle down to household balance sheets, but unfortunately, many believe the banks will just hoard the funds in anticipation of greater exposure to troubled nations inside the eurozone.

Already today, Spanish banking giant Banco Santander (NYSE: STD  ) is down almost 3%, National Bank of Greece (NYSE: NBG  ) about 2%, and BBVA (NYSE: BBVA  ) about 1%.

The Foolish bottom line
The ECB plans to release another three-year allotment at some point, but for now, it seems as though this giant funding has done little to ease market fears. As I noted in an earlier article this week, I'd be very wary when thinking about purchasing European bank stocks; make sure to do your due diligence and realize this sector is very, very volatile.

If you're interested in the banking sector but are too cautious to get involved with European bank stocks or domestic companies that might have large eurozone exposure, there's one stock in particular you may want to check out. In fact, this small-cap bank pays a dividend over 4% and is quite conservative. The Motley Fool just put together a brand-new FREE report that gives you all the details about this awesome stock, called "The Stocks Only the Smartest Investors Are Buying." Click here to get the report thousands have already downloaded, absolutely free!

Jordan DiPietro owns shares of National Bank of Greece and has no excuses, no regrets. Well, maybe just one. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1746578, ~/Articles/ArticleHandler.aspx, 10/26/2016 5:55:58 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,199.33 30.06 0.17%
S&P 500 2,139.43 -3.73 -0.17%
NASD 5,250.27 -33.13 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/26/2016 4:39 PM
^DJI $18199.33 Up +30.06 +0.17%
^IXIC $5250.27 Down -33.13 -0.63%
NASDAQ Composite… CAPS Rating: No stars
BBVA $6.96 Up +0.09 +1.31%
Banco Bilbao Vizca… CAPS Rating: ***
NBG.DL $0.00 Down +0.00 +0.00%
National Bank of G… CAPS Rating: ***
SAN $4.79 Up +0.02 +0.42%
Banco Santander Ce… CAPS Rating: *****