Stocks moved sharply lower at the start of trading on Monday, with lingering concerns about the financial situation in Europe weighing on the markets. The major averages all showed notable moves to the downside after turning in a mixed performance last week.
The initial weakness on Wall Street came as traders are keeping a close eye on the latest developments in Europe, where Spain formally asked for a bailout to shore up its ailing banking sector.
Europe is likely to remain in focus throughout the week, as European leaders are due to hold a summit to discuss the ongoing debt crisis on Thursday and Friday.
Peter Boockvar, managing director at Miller Tabak, said, "With Germany just not giving in to the requests for largesse that the rest of Europe wants them to disperse in the form of socializing debt obligations in the Euro region, nothing of substance will come out of the Thurs/Fri EU summit and markets today are realizing that."
"Without German allowance money, pressure will then build on the ECB to print money to the obvious dismay of the Germans," he added.
Boockvar noted traders are also likely to keep an eye on the U.S. Supreme Court, which is expected to announce its ruling on the healthcare reform law as early as today.
Banking stocks have moved substantially lower in early trading, dragging the KBW Bank Index down by 2.5 percent. Financial giants Citigroup (C) and Bank of America (BAC) are turning in two of the sector's worst performances.
Significant weakness has also emerged among networking stocks, as reflected by the 2.5 percent loss being posted by the NYSE Arca Networking Index.
Oil service, steel, and airline stocks are also posting steep losses, moving to the downside along with most of the major sectors.
The major averages have edged up off their lows for the session in the past few minutes but remain firmly negative. The Dow is down 142.36 points or 1.1 percent at 12,498.42, the Nasdaq is down 36.88 points or 1.3 percent at 2,855.54 and the S&P 500 is down 17.79 points or 1.3 percent at 1,317.23.
In overseas trading, stocks markets across the Asia-Pacific region came under pressure during trading on Monday. Japan's Nikkei 225 Index fell by 0.7 percent, while Hong Kong's Hang Seng Index ended the day down by 0.5 percent.
The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index is down by 0.9 percent, while the German DAX Index and the French CAC 40 Index have tumbled by 1.8 percent and 2 percent, respectively.
In the bond market, treasuries have moved notably higher amid the weakness among stocks. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.3 basis points at 1.619 percent.
by RTT Staff Writer
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