Stocks sink for a third day on worries over Europe
NEW YORK (AP) – Stocks fell for a third day Tuesday as unease about Europe’s debt struggles spread to Portugal, Spain and Italy. A brighter reading on U.S. consumer confidence helped the Dow Jones industrial average pare much of its losses.
The Dow was down 45 points in midmorning trading after the Conference Board reported an unexpectedly sharp rise in its monthly poll of consumer confidence. The index had been down as many as 110 points earlier.
The Conference Board’s index of consumer confidence jumped to a five-month high of 54.1 in November from 49.9 in October. That’s better than analysts expected but still well below the level of 90 that indicates a healthy economy. The index hasn’t been that high since the recession began in December 2007.
The euro briefly fell below $1.30 for the first time since mid-September after investors sold off government bonds from Spain, Portugal and Italy. A bailout of Ireland’s banks announced Sunday hasn’t been enough to assuage worries that other weak European countries will also need to be rescued.
The Dow Jones industrial average fell 45.07, or 0.5 percent, to 11,007.42 in morning trading.
The Standard & Poor’s 500 index fell 7.50, or 0.6 percent, at 1,180.26, while the Nasdaq composite index dropped 21.07, or 0.8 percent, at 2,504.16.
A poor reading on U.S. home prices was also keeping buyers at bay. The Standard & Poor’s S&P/Case-Shiller index showed that home prices are falling faster in the nation’s largest cities. Eighteen of the 20 cities measured in the survey recorded price declines.
In corporate news, shares of Baldor Electric Co. jumped 40.1 percent after the Fort Smith, Ark.-based maker of industrial motors said it had agreed to be acquired by Zurich-based ABB Ltd. for $63.50 a share.
Google Inc. fell 3.3 percent after European regulators launched an investigation into whether the company abused its dominant position in the online search market. It was the first major probe into Google’s business practices.
Barnes & Noble Inc. fell 9.4 percent after reporting earnings that missed analysts’ expectations. Seagate Technology Inc. fell 3.6 percent after the disk drive maker said it had called off plans to go private after deciding the price being offered by a group of private equity firms was too low.
The dollar rose 0.5 percent against an index of six other heavily traded currencies.
Bond prices rose, pushing their yields lower. The yield on the 10-year Treasury note fell to 2.77 percent from 2.83 percent Monday. That yield helps set interest rates on a wide variety of business and consumer loans including mortgages.
European markets were mixed. Britain’s FTSE recovered from earlier losses and rose 0.2 percent in afternoon trading. Germany’s DAX was flat, and France’s CAC-40 fell 0.4 percent.
Asian markets fell on growing expectations that China will have to raise interest rates to keep inflation in check. Japan’s Nikkei fell 1.9 percent and Hong Kong’s Hang Seng fell 0.7 percent.