Mon 4/23/12 4:37 PM – US Stocks Follow Europe Lower

The major European markets were down 2% – 3% today on two news stories – French President Sarkozy’s second place finish in the first round of the French presidential elections and the impending collapse of the Dutch government over disagreemnts on austerity measures.

On the first point, if Sarkozy loses the runoff and he certainly has an uphill battle his opponent is a member of the Socialist Party and will not likely be nearly as willing to go along with Germany’s line of thinking on European financial measures. That introduces uncertainty into the European crisis which the markets dislike.

The Netherlands joins the list of countries at odds over austerity measures, the others being Greece, Italy, Ireland and Spain. Adding France to that list would isolate the Germans among the major Eurozone members.

While the US stock markets opened up lower, they recovered throughout the day and finished down much less than the European markets, keeping the US reputation as the best western stock market in which to invest today. That is a big plus. However, technically it completes the dreaded head and shoulder pattern that predicts lower prices by another 3% – 4%.

Gold was down 0.29%, oil -0.89% and bonds were generally slightly lower.