New York, May 7, 2012
By John Stephenson

It's beginning to feel an awful lot like a replay of last summer's market mayhem with news out of Europe driving daily swings in North American markets. Incumbents have been falling like dominoes in recession-plagued Europe redefining the political landscape once more. Soaring unemployment in Greece, Ireland and Spain, coupled with a growing chorus of protests, risks a fractious and divisive political climate ahead. The changing of the guard in France will surely break the Franc0-German alliance that has insisted on precribing crushing austerity for Europe's indebted periphery—a recipe for deep recessions.

Markets finished last week solidly in the red, posting their worst weekly showing since the beginning of the year. The S&P 500 stumbled badly when the ISM Services reading, coupled with a disappointing non-farm payrolls report, suggested that the U.S. economy may be slowing. While consumers may still be spending on goods, they've slowed their outlays on services, such as health care. That sector generates nearly 10% of overall S&P 500 earnings and accounts for one of every four jobs created so far in this recovery.

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