Italy's close election drops Dow 216 points

Edward Monti, left, a regulatory specialist, confers with

Edward Monti, left, a regulatory specialist, confers with trader Anthony Confusione as he monitors trading activity for Virtu Financial at the New York Stock Exchange. (Feb. 20, 2013) (Credit: AP )

Stocks are having a bad flashback to last spring, when fears about the European debt crisis sent the market spiraling lower.

Monday, Italy's election results showed a close race, leaving investors fearful that Italy will struggle to form a government that can move ahead with reforms to revive the economy.

The Dow Jones industrial average posted its worst drop in more than three months. The Standard & Poor's 500 index, which had its first weekly decline of the year last week, piled on more losses Monday.

The Dow fell 216.40 points to 13,784.17, its biggest drop since Nov. 7. The S&P fell 1.83 percent to 1,487.85, slipping below 1,500 for the first time in three weeks. The Nasdaq composite index dropped 1.44 percent to 3,116.25.

Investors worry about the outcome of Italy's election because it could set off another crisis of confidence in the region's shared currency, the euro. Last spring, investors fretted over the outcome of Greek elections for similar reasons. By the start of June, U.S. stocks had given up the year's gains after a strong start.

In the United States, some analysts say the stock market had gotten ahead of itself. Even after today's sell-off the Dow is still up 5.2 percent for the year and the S&P 500 is 4.3 percent higher. -- AP

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