Stocks Fall Again Due to European Debt Worries

DAVID K. RANDALL, AP Business Writer
NEW YORK -- Technology company troubles and renewed concerns about Europe's debt dragged stocks lower for a second day.
European finance ministers approved $110 billion in rescue loans to Portugal on Monday, but have yet to decide on a second rescue package for Greece.
The arrest of the head of the International Monetary Fund is expected to make solving Greece's problems more difficult. The official, Dominique Strauss-Kahn, had been heavily involved in trying to fix the debt crises in Portugal and Greece. He is being held without bail on charges of sexually assaulting a hotel employee in New York City.
Technology companies sustained the largest losses in Monday trading. Yahoo! and both fell by more than 4 percent. Yahoo is in a dispute with Alibaba Group Holding Ltd. over its online payment business. Yahoo owns a 40 percent stake in the company, which transferred its online payment business to another company without consulting Yahoo.
Investors are growing increasingly concerned over the prospect of an unprecedented U.S. default on its debt. Treasury Secretary Timothy Geithner told Congressional lawmakers in a letter Monday that the agency is taking steps to postpone a default.
"The main thing hanging over most financial markets right now is what's going to happen with the debt ceiling and government borrowing and spending," said Tim Courtney, the chief investment officer at Burns Advisory Group in Oklahoma City.
The Dow Jones industrial average lost 47.38 points, or 0.4 percent, to close at 12,548.37. The Standard & Poor's 500 index fell 8.30 points, or 0.6 percent, to 1,329.47. The Nasdaq fell 46.16, or 1.6 percent, to 2,782.31.
Commodity prices were mostly lower. Oil prices fell $2.28 to settle at $97.37 a barrel Monday as worries eased that Mississippi River flooding could disrupt refineries and slow demand.
Commodities have been falling broadly over the last two weeks because of concerns that the global economy is showing signs of weakening. A series of margin-hikes that were meant to curb the influence of speculators, whose heavy trading sent commodities like silver up more than 11 percent for the year, have also sent commodities lower.
"People are coming back into the commodity markets because they think that, in the back of their minds, the global growth story will continue," said Zahid Siddique, an associate portfolio manager at Gabelli Equity Trust, a money manager based in New York.
The stock market has lost some of its momentum in the last few weeks after finishing its best first quarter since 1998. Companies in so-called defensive industries like health care, utilities and consumer staples have outperformed lately due in part to concerns that high gas prices will slow the economy and cut into corporate profits.
Two well-known retailers in the U.S. fell after reporting quarterly results Monday. Home improvement company Lowe's Cos. fell 2 percent in after its quarterly report missed Wall Street's estimates and the company cut its outlook for the year. Bad weather and a decline in consumer spending combined to drive its profit down 6 percent in the first quarter.
J.C. Penny Co. Inc. lost 1.5 percent despite raising its full year profit estimates.
One of the most talked-about deals on Wall Street was officially nixed as well. The parent company of the New York Stock Exchange dropped nearly 11 percent after competitors Nasdaq OMX Group and ICE announced that they had withdrawn their hostile bid for the company. NYSE Euronext had angered its shareholders by refusing to meet with the two companies, which offered a higher price than what NYSE received from a German exchange operator. The withdrawn offer clears one hurdle to the proposed combination of the NYSE and its German counterpart.
More than two shares fell for every one that rose on the New York Stock Exchange. Trading volume was 3.5 billion shares.

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May 28 2011 at 11:46 PM Report abuse rate up rate down Reply
Not Again

I just got a $829.99 iPad2 for $98.37 and my girlfriend snagged an awesome $1299 MacBook Air for only $137.93, its being delivered tomorrow. I would be a fool to keep paying high retail prices at places like Walmart or BestBuy, when I even sold a 37" HDTV to my boss for $600 that I only paid $78.24 for. I use two sites, both are good,

May 17 2011 at 10:03 AM Report abuse -1 rate up rate down Reply

In the USA , Obama taks about another banking industry bailout. The taxpayers subsidizing the monthly payments of those about to go under,is just that--ANOTHER BAILOUT OF THE BANKS. Let the banks reduce the principle on troubled loans and take the losses. Why should the taxpayers pay monthly part of the mortgage payment of those who 's loans are about to go into forclosure. Let the banks reduce the principle and take the losses or sell the forclosed properties and then the banks can take the losses at that time. TAXPAYERS ARE ABOUT TO GET SCREWED AGAIN WITH ANOTHER BANKING INDUSTRY BAILOUT. Call and write your senators and congressmen and say NO to this BANKING INDUSTRY BAILOUT.

May 17 2011 at 12:07 AM Report abuse +1 rate up rate down Reply

I love,love,love it when the stock market drops! I couldn't care less if it dropped below 5,000.

May 16 2011 at 10:18 PM Report abuse +1 rate up rate down Reply
1 reply to tonyprovri's comment


May 16 2011 at 10:30 PM Report abuse -1 rate up rate down Reply

The talk of a default is absurd. Servicing the existing outstanding debt costs abut $170 billion/year, or about 7% of annual receipts of approximately 2.7 trillion. In other words, if we didn't raise the debt ceiling, we could service our outstanding debt, and STILL spend another $2.5 trillion annually WITHOUT a default. This is nothing more than fear-mongering by demagogues who recognize they can take advantage of the intellectually defenseless.

May 16 2011 at 9:52 PM Report abuse -2 rate up rate down Reply

Europe debt?? who cares! Our country is broke- raiding pension funds today- what tommorow- Social Security fund?
O' **** that was done awhile ago- what is left?
The Fed cannot raise interest rates as they are buying their own treasuries-
Washington has left this country high and dry- Sorry I love this country and do not understand the blood shed for us to be free and what is happening-
Please do not blame Reblicrats or Demlicans- all the same-

May 16 2011 at 9:06 PM Report abuse rate up rate down Reply

No one will be helping the US. The hole we are digging will be ours and ours alone. Our country rushes to the aid
of country after country, but we will NEVER be repayed. There will be no help for us...Worried we should all be worried!

May 16 2011 at 6:13 PM Report abuse +5 rate up rate down Reply

Who cares about debt in Europe? The debt here in the US has us on the verge of collapse.

May 16 2011 at 5:39 PM Report abuse +4 rate up rate down Reply

With all the bad news the dollar still lost ground to the euro today??
The chickens have come home to roost and inflation is killing the dollar.

May 16 2011 at 5:34 PM Report abuse +4 rate up rate down Reply

BS. The debt worries of europe have been ongoing for over a year. The Fed must be slowing the printing press. IE QE2 comming to an end. Watch for QE3, but what will they call it so most dont know whats going on. Maybe another stimulas at a trillion dollars. whatever it is Obama is standing ready with the credit card and our congress dosent have the guts to stop it, so the question is how far do we go before we find ourselves at the point Russia was in in 1989 BANKRUPT.

May 16 2011 at 5:23 PM Report abuse +4 rate up rate down Reply