Bears have been counting on the crisis in Europe to take a turn for the worse and on Wednesday it appears they may have gotten their wish.
The S&P broke below the psychologically important 1300 in mid-day trade as investors ran for the exits due to a growing belief that Greece would exit the European Union.
Concerns intensified dramatically after euro zone officials agreed that each EU member nation must prepare an individual contingency plan in the eventuality that Greece decides to leave the single currency area.
On the news, the euro traded below $1.2588, its lowest level since July 2010.
“I think this is the beginning of the end of the union,” says trader Steve Cortes, giving voice to a growing belief that Greece may just be a road map for other nations to also exit.
The great concern for investors isn't the exit itself, Greece is a relatively small economy, but rather the uncertainty and potential ripple. Skeptics say it may be much wider reaching than anticipated.
Trader Steve Cortes is among those skeptics; he the ripple sends the S&P sharply lower. "The last time the euro was at these levels, the the S&P was at 1100," he says. "That's a massive divergence between the foreign exchange markets and the US stock markets and I'm betting that the currency traders are right."