Fox & Friends repeatedly falsely suggested the stock market declines in the U.S. and Asia were solely in response to the Senate passing financial reform, despite the fact that guest Stuart Varney said the drops were "not about" the legislation. Indeed, the declines are largely blamed on economic instability in Europe.
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Fox & Friends blames market drops on financial reform
Carlson: "At first blush the markets don't like it at all." Fox & Friends co-host Gretchen Carlson stated on May 21, "[w]ell the Senate makes a historic move in other news, and at first blush, the markets don't like it at all. The Senate passed the president's financial reform bill last night. This morning, Dow futures down 3. European markets are off about 20 and the Asian markets are down about 10."
Doocy: "So far this morning, the markets haven't really reacted positively to" financial reform. Co-host Steve Doocy reported later in the program, "[i]n a late night session, the U.S. Senate has approved an historic crackdown on financial reform. And so far this morning, the markets haven't really reacted positively to it. The Dow futures are down about 10. European markets are off about 1 1/2 percent and the Asian markets already closed down a little better than 2 percent because of the sell off here in the United States yesterday."
Varney told Fox & Friends the market decline was "not about" financial reform
Varney: Stock market drop was "not about" financial reform. During the program, Doocy stated, "Meanwhile, yesterday, the stock market crashed as the Senate passed that bill that clamps down on Wall Street. A coincidence?" Doocy then asked Fox business analyst Stuart Varney, "Are these connected or are they two separate things?" Varney stated:
VARNEY: Largely separate. Largely separate.The big decline in the stock market, 1,000 points down, by the way, in a couple of weeks, that's everything to do with the American situation that is a slow recovery with no jobs, some say the failure of Obama's economic policies, and Europe, collapse in Europe, chaos in Europe. This financial regulation reform bill, that really hasn't had that big of an impact on the stock market. It's not about that.
Varney: Friday's activity is a "replay of yesterday." Later on America's Newsroom, Varney stated that Friday's drop is a "replay of yesterday in many respects" and that "[e]verybody's nervous because you've got chaos in Europe, a weak U.S. economy":
VARNEY: If it were open for trading right now, the Dow would be below 10,000. It will be off around 85, 90 points. You're seeing a replay of yesterday in many respects. Oil is down, gold is down, the stock market is down, but you've got Treasury bond prices way up. Now that's a technical thing but it means there's a flight to safety. Everybody's nervous because you've got chaos in Europe, a weak U.S. economy, flooding to safe havens like the U.S. treasury market. That's what's happening now.
Reports: Current market declines primarily due to European economic instability
WSJ: Market decline is "an accumulation of worrisome developments, primarily out of Europe." The Wall Street Journal reported May 21:
New worries about the health of the global economy flared Thursday, driving U.S. stocks to their first official correction since the bull market began last March, roiling credit markets and causing big swings in currencies.
There was no one particular piece of news that drove Thursday's market swoon. Instead, investors said it was an accumulation of worrisome developments, primarily out of Europe, where officials are struggling to convince the market they have the Greece crisis under control. Worries mounted that the troubles may spread beyond Europe to stymie growth elsewhere. And China's effort to tighten monetary policy has made investors increasingly nervous about growth slowing in that country.
Concerns are building that the progress made in pulling the global economy out of recession is slipping away. That contrasts with the sentiment this time last year when central banks and governments seemed to be working effectively together to stabilize the markets and economy.
NY Times: "Stocks on Wall Street were unsettled in early trading on Friday following declines in Europe and Asia." The New York Times reported on May 21 that, "[s]tocks on Wall Street were unsettled in early trading on Friday following declines in Europe and Asia amid continued fears that the debt crisis could undermine the economic recovery in the euro zone and perhaps beyond":
The decline in Europe came even as German lawmakers voted to approve their country's share of the nearly $1 trillion rescue deal to save the euro and contain the debt crisis.
The Dow Jones industrial average fell below 10,000 within minutes of the opening bell, declining 143.59 points, or 1.4 percent, before regaining some ground. Shortly before 10 a.m., both the Standard & Poor's 500-stock index and the Nasdaq composite index crept into positive territory.
The last time that the Dow closed below 10,000 was Feb. 8, when the index finished at 9,908.39. The reason for the decline back then: Greece's debt crisis.
"Certainly when you saw Europe stall you knew it wasn't going to be pretty," said Uri Landesman, president of Platinum Partners, speaking soon after the opening. "I expect there to be more of the same today," with riskier assets selling off.
NY Times: "[B]iggest factor unnerving markets" was fear that European economic stability "might spill to the United States." The New York Times also reported in another May 21 article that "traders and analysts said the biggest factor unnerving markets was the continuing prospect that European governments might not have done enough to stem the panic over Greece and other heavily indebted nations, and that their problems might spill to the United States, affecting the pace of economic recovery." From the article:
Stock markets in Asia fell sharply in early trading on Friday after continuing declines on Wall Street and in Europe.
Fears that the fragile economic recovery in the United States might be threatened by the financial and political crisis inEurope gripped Wall Street on Thursday, sending the stock market into a sharp decline and leaving anxious traders wondering where the pain might stop, The New York Times's Mark MacDonald reported.
Nagging worries that Europe's debt crisis could spread, compounded by uncertainties over financial regulation on both sides of the Atlantic, have set investors on edge the world over.
But traders and analysts said the biggest factor unnerving markets was the continuing prospect that European governments might not have done enough to stem the panic over Greece and other heavily indebted nations, and that their problems might spill to the United States, affecting the pace of economic recovery.
Some economists warn, for example, that weakness in Europe's economies combined with the ongoing appreciation of the dollar against the euro could hurt American exports.
The Times also reported that "uncertain progress of financial reform in the United States" and in Germany, the labor strike in Greece, and violence and political tension in Asia were also partially responsible.
Bloomberg: Stocks fell "on concern that Europe's debt crisis will slow global economic expansion." Bloomberg reported on May 21 that, "[s]tocks fell for a seventh day and oil declined on concern that Europe's debt crisis will slow global economic expansion. The euro erased gains that drove it to its strongest in a week."