Stocks sink as Euro hangover sets in

After two weeks of stock market gains that were predicated on European progress on its debt crisis, a Euro hangover has beset investors. The party seemed great -- hooray, the European summit and accompanying fiscal compact will save the globe! In retrospect, investors may have prematurely popped the champagne and now a dull ache hangs over stocks, which are down nearly 1.5 percent across the board.

What happened over the course of a weekend? Investors may have realized that an 8.5 percent, two-week rally was a little bit of an overreaction on the upside, especially considering that number of lingering questions about the deal. Here are a few:

-- How long will it take each country to ratify the compact?

-- Angela Merkel is all about the austerity -- we get that, but when each country slashes its spending, how does the region grow?

-- ECB President Mario Draghi said the pact was a "very good outcome." When will the ECB come to the table as the much-needed lender of last resort to the debtor nations?

-- How will the PIIGS fund their debt in the short-term if the ECB isn't willing to pitch in? (Yields on Italian 10-year bonds, which had dropped below 5.8 percent last week, are now over 6.5 percent)

A warning from Moody's that it will revisit the ratings of all EU countries in the aftermath of the summit seems to be adding a little fuel to the fire. I'm not exactly sure why these ratings announcements matter, considering how colossally bad all of the three big firms were in the boom, in the bust and in whatever we're calling this period (bust redux?)

Added to the European anxieties was more mundane corporate news: Intel reduced its fourth-quarter revenue forecast by about $1 billion, citing severe flooding in Thailand and broader worries about the global economy. The Intel news sent shares down 4 percent, making it one of the worst performers in the Dow.

It's just one day of trading, but for those who were hoping that we could all slide into the holidays without any more volatility, forget it.

Jill Schlesinger

Jill Schlesinger, CFP® is the Emmy-nominated business analyst for CBS News. She covers the economy, markets, investing and anything else with a dollar sign on TV, radio (including her nationally syndicated radio show), the web and her blog, "Jill on Money." Prior to her second career at CBS, Jill spent 14 years as the co-owner and chief investment officer for an independent investment advisory firm. She began her career as a self-employed options trader on the Commodities Exchange of New York, following her graduation from Brown University.

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