By Rita Nazareth - Nov 14, 2011 9:33 PM GMT+0700
U.S. stocks fell, signaling the Standard & Poor’s 500 Index may snap a two-day rally, as a surge in Italian borrowing costs at an auction deepened concern Europe will struggle to contain its debt crisis.
The S&P 500 dropped 0.5 percent to 1,257.78 at 9:32 a.m. New York time. The benchmark gauge for American equities increased 2.8 percent during the previous two days. The Dow Jones Industrial Average declined 20.73 points, or 0.2 percent, to 12,132.95 today as Boeing Co. (BA) and International Business Machines Corp. (IBM) helped limit losses.
“Europe’s putting some pressure on the U.S. markets,” Peter Jankovskis, who helps manage about $2.4 billion at Oakbrook Investments in Lisle, Illinois, said in a telephone interview. “The market will continue to be sensitive to that for quite some time. In the U.S. market, there’s a good amount of positive news. Maybe people will look at it as a buying opportunity.”
Stocks rose last week, restoring the year-to-date gain for the S&P 500, as improving economic data and leadership changes in Greece and Italy bolstered investor optimism. Equities tumbled on Nov. 9 as yields on Italian government bonds surged, fueling concern European leaders will struggle to fund bailouts.
Italy sold 3 billion euros ($4 billion) of five-year bonds, the maximum target, at the highest yield in more than 14 years as Mario Monti seeks to form a new government to restore investor confidence in public finances. Spanish 10-year bonds slid, pushing the yield on the securities to more than 6 percent for the first time since Aug. 5. German Chancellor Angela Merkel called for an overhaul of the European Union, advocating closer political ties and tighter budget rules.
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
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