Market continues to fall as market worries turn to Portugal

The Dow Jones Industrials finished down nearly 2% at 10,992, a fall of 213 points as Greek Debt worries drove  the sell off. The FTSE 100 is currently down 55 points at 5,547 as the Athens stock exchange bans short selling for 2 months to try and stem share price falls and the the Portugal stock market also fell heavily this morning. Focus has shifted to Portugal following S&P's debt downgrade as the next potential bail out victim.


After weeks of looking way too expensive, there are several stocks that are beginning to move into the value zone.

FTSE drops 150 points on Greece, Portugal worries

The FTSE 100 dropped 150 points or 2.6% to finish at 5,604 whilst the DOW Jones industrials are currently down 101 at 11,101. The FTSE was hit hard as commodity related stocks took a dive as the "safe haven" U.S. dollar strengthened (e.g. BHP Billiton down 4.2%, Rio Tinto down 5.2%). The reason was debt rating agency S&P's cut to Greece’s credit rating to junk and also cut its rating on Portuguese government debt. 

Greece’s rating on the short-term debt is cut to BB+ from BBB+, while the long-term rating has been lowered to B from A-2. Both ratings are below what is considered “investment grade”. The outlook for Greece is also negative. Portuguese government debt was cut by two notches to A- FROM A+, saying the downgrade reflects “the amplified risks Portugal faces” and the outlook on its rating is negative.

FTSE 100 component Reckitt Benckiser also fell over 4% to £34.97 as the company issued a strong performance in Q1 with earnings rising 14% to £461 million but warned of the potential impact of generic Suboxone competition in the U.S. during 2010 (these risks have been highlighted in a previous Contrarian Investor UK story).