This week saw the first weekly loss since December with the Dow Jones ending the week 2% lower. Financial stocks were among the worst performers with the sector down 1.3% on Friday. This was due to the continuing problems with the Greek bailout. It still remains uncertain whether the Greek government will accept the terms of the bailout package or whether the government will continue to stay in power at all. Adding to these concern was the end of the G-20 meeting which concluded without a commitment of money to the Europe bailout fund.
Greek Prime Minister George Papandreou survived his confidence vote and the referendum on the bail out plan has been abandoned. The confidence vote was won by Papandreou 153-145. Whether the government will continue to survive however is still uncertain. The main opposition leader Antonis Samaras continues to call for a snap election and he would not confirm whether his conservative party would be willing to join in on any coalition talks. The country also remains in turmoil with continued protests and strikes against the austerity measures that are being imposed. In order to receive bail out funds Greece has been forced to adopt tax hikes and cuts to pensions and salaries. These moves have been deeply unpopular and have caused the prime ministers popularity to plummet. Many analysts view the problem of how to deal with Greece as simply having been delayed. While the confidence vote has been survived and the referendum will no longer take place this does not resolve the larger issue of how to deal with the problem of Greece, or even how to contain those problems from spreading.
European stocks reflected the mood in the United States with the Euro Stoxx 50 index falling 2.4 percent down. The German DAX was also down 2.7 percent and the FTSE ended the Dow a nudge lower at 0.3 percent down. Financial stocks were hard hit in Europe as well on Friday. Shares of German bank Commerzbank AG were down 6.3%. This was on the back of news that the bank would be posting a third quarter net loss of EUR687 million. This is down from a profit of EUR113 million last year for the same quarter.
Groupon started trading on Friday. With the company raising $700 million it was the largest IPO for an internet company since Google listed in 2004. The stock ended its first day of trading up $25.11 or 31% higher. The stock traded as high as $31.14 at one point in the day. The stock was also highly traded with 49.8 million shares changing hands. That constitutes approximately 142% of the listed stock. While revenues for the company have grown sharply from $4 in 2009 to $420 in the last financial quarter it still yet to make a profit. In fact during the first nine months of this year Groupon lost $215 million.
There was other promising news on Friday with the labor department raising its job growth estimates and statistics to show that 102,000 more jobs had been added in August and September than had been previously shown. Unfortunately this good news was overshadowed by the drama that is playing out in Greece.