Greece Default Fears Send Dow Jones Industrial Average Tumbling

The Greece ETF Headed for Its Worst Day Ever

Jun 29, 2015 at 12:07 PM
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The Dow Jones Industrial Average (DJIA) is staring at a triple-digit deficit at midday, after Greece's financial crisis took a turn for the worse over the weekend -- and a now-scheduled July 5 referendum stokes fear of a possible "Grexit." Adding to the risk-off backdrop is a continued sell-off in China despite a fresh round of stimulus measures by the central bank, as well as a projected default in Puerto Rico. Specifically, Alejandro Garcia Padilla -- the commonwealth's governor -- said its $72 billion in debt is "not payable." At last check, all but one Dow component was in the red -- with JPMorgan Chase & Co.'s (NYSE:JPM) analyst-induced drop helping to lead the path lower. The blue-chip index is now in the red on a year-to-date basis.

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Among the stocks with notable put volume is MBIA Inc. (NYSE:MBI), with the contracts crossing the tape at 15 times the average intraday pace. The bond insurer is down 16.6% at $6.94 -- and fresh off a two-year low of $6.84 -- on worries of a possible Puerto Rico debt default, as well as a downgrade to "neutral" from "buy" at BTIG. Meanwhile, the security has been relegated to the short-sale restricted list, and earlier, its 52-week at-the-money implied volatility topped out at an annual high. Option traders hoping for even more downside appear to be purchasing new positions at the July 7 put.


Vitae Pharmaceuticals Inc (NASDAQ:VTAE) is one of the leading laggards on the Nasdaq, after the drugmaker said its type 2 diabetes treatment -- VTP-34072 -- failed as an add-on to a more common form of diabetes therapy. However, despite today's bear gap, which has VTAE down 25.5% on the year at $12.40, the stock managed to find a firm foothold atop the round-number $10 mark.

MBI's fellow bond insurer Assured Guaranty Ltd. (NYSE:AGO) is one of the top losers on on the Big Board, down 12.3% at $24.03 -- and on pace to close south of its 80-day moving average for the first time since May 7. BTIG also weighed in on AGO, lowering its outlook to "neutral" from "buy." Heading into today's session, the stock was enjoying a more than 5% year-to-date lead.




The CBOE Volatility Index (VIX) is up 3.3 points, or 23.3%, at 17.29 -- and lingering near its highest level since mid-February.


Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 2.49, with puts more than doubling calls. At last check, SPY is off 2.3 points, or 1.1%, at $207.53.


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