Stocks closed with wide losses two days ago, sending the Dow Jones Industrial Average to its lowest close in more than a month, as shareholders focused on a increasing financial crisis in Italy, Greece and Spain. The Dow lost 131 points, or 1.1 percent, to 12,381, with a 2.3 percent drop in Caterpillar shares leading declines in all but one of its mechanism.
The Standard & Poor’s 500 fell 16 points, or 1.2 percent, to 1,317. A 1.5 percent drop in the tech sub-sector led declines in all 10 industry groups. The Nasdaq Composite fell 44 points, or 1.6 percent, to 2,759. In the nonexistence of major US earnings reports or economic data, shareholders focused on negative headlines from Europe, including a Standard & Poor’s outlook cut on Italian debt and regional-election losses for Spain’s ruling Socialist party.
According to analyst, Too much severity could strangle off spending and weaken the Continent’s fiscal recovery even as markets around the world, including in the US, demand that the region gets its debt burden under control.
Monday’s sell off replicates the same investor risk dislike that drove a slump in crude-oil prices below $98 a barrel and a rally in the US dollar versus major foreign currencies. Both the Dow and the S&P 500 have slid for three following weeks, marking their longest losing streak since August.
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