Many investors in the United States are wondering how the problems in Greece can have such a large impact on U.S. markets. That impact has been felt over the past few days with the stock market indices feeling pressure from the problems in Greece. The impact was then felt today on the stock market with the major indices jumping up over 1% when reports surfaced of possible help for Greece from the European Union and Germany. But the true story is much bigger than Greece alone.

Jean-Claude Trichet

The fear among finance ministers and economists is that the problems in Greece are spreading to other EU countries. Jean-Claude Trichet, head of the European Central Bank, is fully aware of the threat posed by Greece to other EU member nations.

Two other EU countries, Spain and Portugal, are also under significant pressure and are also running high budget deficits. Because of this fear of a domino effect, Mr. Trichet has been working with Germany to take the lead in providing loan guarantees and putting together an aid package for Greece.

Some economists here in the U.S. believe that the problem is even more severe than most believe, and think that the International Monetary Fund should step in and provide loans to help stabalize the situation in Greece. Ultimately, the fear in the global market over instability in Greece and other EU member nations is impacting stock prices in the U.S.

The Dow was up 10.05 points for the day closing at 10,012.23 – an increase of .1 percent. However, the Dow Jones Industrial Average was down nearly .5 percent for the week and with 4 straight weekly declines is down about 6 percent from its high this year. The NASDAQ finished up 15.69 to close at 2,141.12, an increase of about .75 percent. The S&P 500 also sported a gain for the day moving up 3.08 to close at 1,066.19.

Early in the morning, investors were anxious for the latest reading on jobs and unemployment. The government report showed a loss of 20,000 jobs, but also showed a drop in the unemployment rate to 9.7 percent. The drop in the unemployment rate could be attributed to an increase in discouraged job seekers who have given up looking for work. The employment report was not in line with economists expectations, who were expecting an increase of roughly 5,000 jobs along with an increase in the unemployment rate to 10.1 percent.

Investors are uncertain which direction the market will move in the coming weeks. Fear among investors, as measured by the CBOE volatility index or VIX, spiked today to 29 but eventually retreated and settled around 26. Many investors are expecting a roller coaster ride in the stock market over the coming weeks and are looking to earnings reports, retail sales and weekly jobless claims, as well as the consumer sentiment reading late next week.