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2011-05-24
Wall Street ends at one-month low on euro-debt worries



(Reuters) - U.S. stocks closed at their lowest levels in a month on Monday in a sign of increasing doubt that equity markets can weather recent weakness in global manufacturing and demand.


Industrial, energy and technology stocks, closely related to growth, were among the day's top decliners. Poor manufacturing figures from Germany and China were a surprise and gave investors reason to shed positions in those industries.

Mining machinery maker Caterpillar Inc (CAT.N), a Dow component, lost 2.3 percent to $101.89, while the S&P industrial sector index .GSPI fell 1.4 percent and the S&P info-technology sector index .GSPT declined 1.5 percent.

The drama surrounding the euro zone's debt crisis added to investor anxiety. It furthered a recent trend of selling commodities, the euro, and stocks in tandem.

The main driver of the market's decline is "a combination of global economic cooling and an increase in risk from Europe," according to Paul Zemsky, head of asset allocation at ING in New York.

"Throw in the Greek downgrade on Friday, warnings about other countries being downgraded ... it's just a negative cocktail right now."

Negative ratings actions on  Greece and Italy and regional election results in Spain raised concerns about the deepening of the euro zone's debt problems. Investors worry that voter rebellions against austerity plans could put some government debt at risk of default.

The euro hit a two-month low against the U.S. currency.

The Dow Jones industrial average  DJI dropped 130.78 points, or 1.05 percent, to 12,381.26. The Standard & Poor's 500  SPX lost 15.90 points, or 1.19 percent, to 1,317.37. The Nasdaq Composite  IXIC fell 44.42 points, or 1.58 percent, to 2,758.90.

In a sign of technical weakness, the S&P 500 closed below its 50-day moving average for the first time since April 19. It is also at its lowest level since that day.

Global stocks as measured by MSCI .MIWD00000PUS dropped 1.8 percent, the biggest daily decline in more than two months.

The stronger dollar hurt commodity prices and stocks in the energy and basic materials sectors. Large exporters, which have benefited from a weaker U.S. currency, were also hit hard.

Shares of Coca-Cola Co (KO.N) fell 1.2 percent to $67.49 and equipment manufacturer Joy Global Inc (JOYG.O) dropped 3.1 percent to $87.54.

"A dollar rising is near-term negative for stocks while commodities (falling) can have both positive and negative aspects," ING's Zemsky said.

"On one hand, (commodities) are showing growth is slower than what people originally thought, but at the same time, it's also a big tax cut to the consumer through lower gasoline prices."

Gasoline futures are down roughly 15 percent so far this month. On Monday, U.S. July crude oil futures lost 2.4 percent to settle at $97.70 a barrel.

An S&P index of top U.S. retailers' stocks .RLX performed better than the overall market, falling 0.46 percent.

About 6.44 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, far below last year's estimated daily average of 8.47 billion and under the 7.63 billion traded daily on average so far this year.

Decliners beat advancers on the NYSE by a ratio of almost 4 to 1, while on the Nasdaq, more than four stocks fell for every one that rose.

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2011-5-24 10:17:36
Haha~my first participation~
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2011-5-24 10:19:52
Through this article it shows that the global economy fall into a mess again.  The recovery is more difficult and slower than expected.
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2011-5-24 10:36:23
14,14
U.S. stocks closed sharply lower Monday as simmering worries about Europe's debt problems boiled over, sending investors in search of safety.
Rating agency Fitch cutting Greece's credit rating by putting it in junk bond territory renewed concerns about the eurozone's debt crisis. That helped boost the U.S. dollar to a two-month high against the euro. The stronger dollar pressured prices for commodities that are priced in the U.S. currency, such as oil.
Looking ahead, there aren't a lot of reasons for optimism. Investors seem to have taken to heart the old Wall Street adage of "Sell in May, then go away."
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2011-5-24 10:37:11
weather  平安度过,挨过   tandem串联式自行车      austerity    严厉;严格;严酷;简朴, 朴素
12.12
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2011-5-24 10:39:50
14,14
It's almost a habit now to follow you, as a result, I can't help replying.
I’m a little suspicious about the saying that “A dollar rising is near-term negative for stocks”. If there is a strong causality between dollar and stocks, why not long ago, when dollar was remarkably weak, the stock market didn’t go up subsequently?
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