Stocks fall as worries about European debt return
NEW YORK (AP) – Stocks closed lower Tuesday following new worries about Europe’s debt problems. Treasury prices rose and gold settled at a new high as investors sought out safe assets.
U.S. stocks followed European markets lower after news reports said banks in Europe may have more risky government debt on their books than was disclosed during “stress tests” earlier this year. That could mean fees from regulators and more capital-raising by the banks to bolster their balance sheets.
Shares of major European banks including Barclays PLC and UBS fell, and the dollar rose against the euro.
Stocks had been doing well last week, rallying on improved news about job growth and gains in manufacturing in the U.S. and China. The better economic news helped the market end higher for the week, breaking three straight weeks of losses.
The Dow Jones industrial average fell 107.24 points, or 1.0 percent, to close at 10,340.69.
Broader indexes also fell, making for a weak start to a week shortened by the Labor Day holiday on Monday. The Standard & Poor’s 500 index lost 12.67, or 1.1 percent, to 1,091.84, while the Nasdaq composite index fell 24.86, or 1.1 percent, to 2,208.89.