U.S. stocks fall as EU debt fears weigh; Dow drops 1%
Investing.com
Published Nov 16, 2011 10:15AM ET
During early U.S. trade, the Dow Jones Industrial Average tumbled 1%, the S&P 500 index slumped 0.85%, while the Nasdaq Composite index declined 0.75%.
Concerns over Italy’s debt woes lingered as the yield on the country’s 10-year bond hovered close to the 7% threshold widely seen as unsustainable, despite the European Central Bank supporting the regional bond by purchasing Italian and Spanish government debt.
Fears that the debt crisis will spill over to the region’s banking sector resurfaced after the largest Italian lender Unicredit said it would ask the ECB to extend its access to funding.
The news weighed on shares in the financial sector, with Bank of America dropping 1.25%, Citigroup shares slumping 1.8%, while investment banks Morgan Stanley and Goldman Sachs falling 2% and 1.3% respectively.
Meanwhile, shares in clothing retailer Abercrombie & Fitch plunged 15.1% after reporting lower-than-expected third quarter earnings, as rising commodity costs pressured margins.
Personal computer maker Dell saw shares slump 2.2% after it lowered its full-year earnings outlook, citing “macroeconomic weakness and uncertainty about the hard-disk drive market”.
On the upside, shares in the second largest U.S. discount retailer Target rose 1.8% after saying that third quarter net income rose 3.7% from a year earlier on 5.4% higher sales.
Shares in Blackberry-maker Research in Motion jumped 2% after Goldman Sachs upgraded the stock to ‘neutral’ from ‘sell’, citing its cheap valuation.
Across the Atlantic, European stock markets were mixed in choppy trade. The EURO STOXX 50 edged 0.2% higher, France’s CAC 40 eased up 0.1%, Germany's DAX retreated 0.85%, while Britain's FTSE 100 fell 0.55%.
Earlier Wednesday, the U.S. Department of Labor said the consumer price index dropped 0.1% in October. Analysts had forecast CPI would be flat last month after rising 0.3% in September.
Separately, the Federal Reserve said that industrial production rose by 0.7% in October, beating expectations for a 0.4% gain, after falling by 0.1% in the previous month.
Get The News You Want
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.