Stocks fall sharply on euro crisis angst
Trader Edward Curran works on the floor of the New York Stock Exchange. (June 1, 2012) Credit: AP
A burst of enthusiasm over a rescue of Spanish banks melted away Monday within hours, and investor anxiety about the troubled finances of Europe grew on both sides of the Atlantic. On Wall Street, stocks opened sharply higher but sank all day. Selling only accelerated in the last hour of trading, and the Dow Jones industrial average closed down 142 points.
More alarming, bond investors signaled that they are less confident about lending money to the governments of both Spain and Italy, which investors fear will be next to seek help.
The rescue, announced Saturday, figured to soothe financial markets. Instead, it inflamed them.
Investors are already worried about weaker U.S. job growth and an economic slowdown in Asia. And the next flashpoint in the Europe crisis, an election in Greece on Sunday, could speed that country's exit from the euro.
Jim Herrick, director of equity trading at Baird & Co., said investors realized "that this Band-Aid approach with Spain will not solve larger problems in Europe and that this could be a long, arduous process."
The Standard & Poor's 500 index ended down 16.73 points at 1,308.93, the Nasdaq closed down 48.69 points at 2,809.73, and the Dow finished down 142.97.
