US stocks have skidded amid a global sell-off on renewed eurozone sovereign debt concerns that Spain was headed for a bailout and Greece could exit the eurozone.
Spain’s borrowing costs on Monday struck highs considered unsustainable, sparking fears that the eurozone’s fourth-largest economy may require a bailout.
“Growing anxiety over a potential bailout for Spain and a flare-up in Greek default and eurozone exit worries set off a global sell-off in equities today, with markets in the US also succumbing, but able to come off the worst levels of the day,” said Charles Schwab & Co analysts.
Stocks were mired in red from Monday’s opening bell, tracking declines in European markets.
The Dow Jones Industrial Average recovered from a loss of over 200 points to close at 12,721.46, down 101.11 points, or 0.79 per cent, putting in a second straight day in negative territory.
The S&P 500, a broad measure of the markets, fell 12.14 points (0.89 per cent) to 1,350.52, while the tech-rich Nasdaq dived 35.15 points (1.20 per cent) to 2,890.15.
The US economic calendar was bare.
Dow member McDonald’s added to the gloom by revealing disappointing second-quarter earnings. The fast-food giant’s shares plunged 2.9 per cent.
Oilfield services giant Halliburton bucked the downturn, adding 2.4 per cent after posting earnings that topped Wall Street estimates.
ExxonMobil lost 0.9 per cent as oil futures prices fell more than 3.0 per cent.
A massive Chinese-Canada takeover deal in the energy sector was in focus.
Chinese state-owned oil and gas giant CNOOC Ltd will buy Canadian oil company Nexen for $15.1 billion, the two companies announced.
The cash deal, subject to regulatory approval, would be China’s largest foreign commercial purchase to date.
CNOOC’s US-traded shares dropped 4.3 per cent, while Nexen’s soared 51.8 per cent to $25.90 on the New York Stock Exchange.
Apple slipped 0.1 per cent. An appeals court on Monday sided with bankrupt photo pioneer Eastman Kodak by endorsing a US International Trade Commission move rejecting claims it infringed on two Apple patents. Kodak dropped 7.0 per cent to 24 cents in over-the-counter trade.
The Wall Street rout extended Friday’s losses spurred by worries about Spain’s fiscal health. The Dow lost 0.9 per cent.
Bond prices spiked higher. The 10-year Treasury yield dropped to 1.44 per cent from 1.46 per cent Friday, while the 30-year fell to 2.51 per cent from 2.55 per cent.
Bond prices and yields move in opposite directions.
