- Obama military downsizing leaves U.S. too weak to counter global threats, panel finds
- Sen. Tom Coburn vows to slow down budget-busting bills ahead of recess
- Obama fantasizes about more executive power, signs new order on federal contractors
- Clintons call Klein, Halper, Kessler ‘a Hat Trick of despicable actors’: report
- Boehner accuses Obama of ‘legacy of lawlessness’
- Pro-marijuana group claims responsibility for Brooklyn Bridge flag swap
- Young adults shun Obamacare mostly due to cost: survey
- Stabbing attack on transgender girl, 15, was ‘bias motivated,’ police say
- LGBT adults still lean overwhelmingly toward Democratic Party
- Lawmakers rattled by Syria genocide horrors, call on Obama to act
Stocks fall sharply as Europe worries deepen
Question of the Day
NEW YORK (AP) — Stocks fell sharply Tuesday as worries deepened about Europe’s debt crisis and the weak U.S. economy. The yield on the 10-year Treasury note traded below 2 percent as investors sought safety.
The Dow Jones Industrial Average was down 190 points, or 1.7 percent, to 11,050 in early afternoon trading. It had been down as many as 307 points earlier. Pfizer Inc. was the only one of the 30 stocks in the average that rose.
The S&P 500 lost 19, or 1.6 percent, to 1,155. The Nasdaq composite fell 37, or 1.5 percent, to 2,443.
The losses came after steep declines in European markets. The Stoxx 600 Europe index lost 4.1 percent Monday, while U.S. markets were closed for Labor Day, on concerns that Europe’s debt problems could slow economic growth around the world. The index fell another 0.7 percent Tuesday.
“Everyone is coming back from their vacations and selling first and asking questions later,” said Mark Lehmann, president of JMP Securities.
September is historically the worst month for the stock market. Traders expect the trend to hold true this year as uncertainty continues over Europe’s debt crisis and the stagnating U.S. economy. The U.S. government reported Friday that there was no job growth last month. It was the worst reading on jobs since September 2010.
Italy was hit by a general strike Tuesday ahead of votes this week on a budget-cutting package needed to shore up that country’s finances. In the U.S., President Obama is expected to announce plans for encouraging job growth in a televised address to a joint session of Congress on Thursday evening.
“Until there is clarity on where the economy and European governments are headed, the market will continue to question whether the possibility of a recession is fully priced in,” said Quincy Krosby, the market strategist at Prudential Financial.
Bank stocks fell more than the overall market. Federal regulators filed lawsuits late Friday against 17 major banks, saying they sold Fannie Mae and Freddie Mac billions of dollars worth of mortgage-backed securities that lost value when the housing market collapsed. Bank of America Corp. lost 5 percent. Wells Fargo & Co. and Goldman Sachs fell 3 percent.
Assets that traders see as safer bets during a weak economy rose. The yield on the 10-year Treasury note fell to 1.97 percent. On Monday the yield fell to 1.91 percent in Asian trading, the lowest since the Federal Reserve Bank of St. Louis began keeping daily records in 1962. Bond yields fall when their prices rise.
In a sign that investors expect the economy to slow, oil futures dropped $2, or 2 percent, to $84.44 a barrel.
A relatively strong report on U.S. service companies did little to stem the losses. The Institute for Supply Management said the service sector grew more than analysts had expected in August. Growth in that part of the economy, which employs nearly 90 percent of America’s workforce, fell the three previous months.
TWT Video Picks
Both parties recognize the Democrats' scam
- Inside the Ring: Israel surprised by Hamas tunnel network
- CRUZ: A tale of two hospitals: One in Israel, one in Gaza
- Chicken pox outbreak puts illegal immigrant facility on lockdown
- Israel surprised by Hamas tunnel network
- Report: 40% of weapons sent to Afghanistan are unaccounted for
- Catholic League slams Obama: 'Do Christian lives mean so little to you?'
- GOP leaders delay border bill, leave Obama in control
- CIA admits improperly hacking Senate computers in search of Bush-era information
- Sarah Palin's online channel hits snag as Stephen Colbert buys similar URL
- 'Big Bang' star Mayim Bialik helps send bulletproof vests to IDF
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world