Weekly Wrap

The fiscal situation in Europe reached a breaking point this week, and Greek contagion fears pushed investors into "safe assets," causing a sharp sell-off in global equity markets. In the U.S., the S&P 500 lost 6.4%. The major indices are now all posting slight declines for the year.

All 10 of the sectors that make up the index fell sharply, led by Materials (-8.5%), Industrials (-8.0%) and Energy (-7.9%).

The sell-off began on Tuesday on heavy volume as the contagion fears returned to the forefront. The European Union had agreed to the terms of a Greek bailout package over the weekend, but there were worries that each eurozone government would not approve the terms. There were additional fears about Greece's future even with the bailout package and the additional austerity measures. Its ASE Index tumbled 7.4% that day.

After extending declines on Wednesday, U.S. equity markets had an epic day on Thursday. The sell-off began steepening in early afternoon trade as contagion fears continued to spread, with riots/violence in Greece not helping sentiment.

Then from 2:40 p.m. ET through 3:00 p.m. ET, the major averages plummeted for 10 minutes -- the Dow went from a decline of about 350 points to an all-time record decline of 998.50 -- only to rebound over the next 10 minutes.

U.S. equity markets still closed with sharp declines; the S&P 500 lost 3.2%.

In the end, stories of a "fat finger" trade at a major bank caused the exchanges to cite the move as a trading glitch and cancel trades between 2:40 p.m. ET and 3:00 p.m. ET that were more than 60% away from the consolidated last price at 2:40 p.m. ET.

Meanwhile, investors flocked toward safe assets. The yield on the 10-year Note began the week around 3.65%, but declined as low as 3.26% on Thursday.

The U.S. Dollar Index began around 81.650, but climbed as high as 85.268. That move was due to a plunge in the euro, which fell below 1.26 against the dollar for the first time since March 2009. However, the yen had a strong week, so much so that the Bank of Japan had to inject 2 trillion yen into the market to stem its rapid rise.

The last week of the first quarter earnings season took a back seat to the news out of Europe, as did economic data. That includes today's much better-than-expected April employment report, where Nonfarm Payrolls came in at 290,000 (consensus 187,000) and private payrolls totalled 231,000 (consensus 87,000). Figures for February and March were also revised higher.

However, markets were extremely volatile on Friday, even though most eurozone countries ended up approving the Greek bailout package despite the earlier fears.

Looking ahead to next week, the economic calendar is light, but the U.S. Treasury will conduct its next round of longer-term bond auctions. Specifically, it will sell $78 bln of 3-, 10- and 30-year Notes and Bonds.

Index	Started Week	Ended Week	Change	% Change	YTD %
DJIA	11008.61	10380.43	-628.18	-5.7	-0.5
Nasdaq	2461.19	2265.64	-195.55	-7.9	-0.2
S&P 500	1186.69	1110.88	-75.81	-6.4	-0.4
Russell 2000	716.60	653.00	-63.60	-8.9	4.4