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Apparently, the Greek deal wasn't quite as resolved as investors had hoped. News that the international bailout hadn't yet gone through pending agreement from the other nations in the Eurozone sent the stock market reeling with renewed fears of a default that could cascade throughout the global financial system. Just before 11 a.m. EST, the Dow Jones Industrials (INDEX: ^DJI ) were down 128 points to 12,762, while the S&P 500 fell 12 points to 1,340.
Alcoa (NYSE: AA ) was the Dow's biggest loser in early trading, falling by nearly 3%. Reuters released a report projecting bad conditions for the aluminum industry for the next several years, as excess capacity and political pressure prevent supply and demand from moving into balance. Rio Tinto (NYSE: RIO ) CEO Tim Albanese said that he "can't predict when the price [of aluminum] will recover," while BHP Billiton reportedly has stopped putting money into aluminum production and is considering whether to continue its aluminum business in the future. With Alcoa already having announced some production cuts last month, it's clear that both it and its competitors are struggling with the metal's low prices.
Oil stocks also fell sharply, with Chevron down 1.5% and ExxonMobil (NYSE: XOM ) dropping 1.3%. The International Energy Agency reduced its forecast for oil demand, expecting an 800,000 barrel-per-day increase for 2012. That's slower growth than its initial projection of a 1.1 million barrel-per-day increase. As the price of crude fell, prospects for Exxon's and Chevron's profits fell along with it.
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