By Kate Gibson
U.S. stocks declined Tuesday as investors sought safer havens to
plant their money, with worries flaring up about Europe's
banks.
"Just as the glass appeared half-full last week, the glass is
looking more like half-empty today," John Stoltzfus, an analyst at
Ticonderoga Securities, wrote in a note.
"In Europe, investors are focusing on the concerns over
implications for the region's economic health, financial sector and
earnings coming from further austerity and fiscal reform," he said
about reports that European banks might have more risky debt on
their books than previously thought.
The Dow Jones Industrial Average (DJI) fell 73.26 points to
10,374.6, with 24 of its 30 components losing ground. American
Express Co. (AXP) led the blue-chip decliners; its shares were down
3.4%.
McDonald's Corp. (MCD) led the Dow's limited gains, with shares
of the fast-food giant up 1.2% at $75.95, surpassing its prior
record hit on Friday. The chain's gains came as troubled rival
Burger King Holdings (BKC) last week agreed to sell itself to
investment firm 3G Capital.
The S&P 500 Index (SPX) shed 8.88 points to 1,095.63, with
financials weighing the most heavily among its 10 industry groups.
Lincoln National Corp. (LNC), off 4%, was among the notable
decliners.
The government on Tuesday announced it would sell warrants in
Lincoln National and Hartford Financial Services Group Inc. (HIG)
as the insurers finish their exit from the Troubled Asset Relief
Program.
Barclays PLC (BCS) fell 5.6% after the British bank said
American Robert Diamond Jr. would take over as chief executive next
year.
Bucking the down trend, shares of Oracle Corp. (ORCL) advanced
5.6% after the database-software titan said it hired Mark Hurd, the
former Hewlett-Packard Co. (HPQ) chief, as one of its
presidents.
The Nasdaq Composite Index (RIXF) slid 18.92 points to
2,214.83.
The dollar gained against the euro and gold, and U.S. Treasury
prices rallied as Wall Street echoed moves from overseas with no
domestic economic data on Tuesday's docket.
"One reason why euro-zone concerns are back in the spotlight are
the strikes in France and London, protesting the austerity measures
put in place," noted analysts at Action Economics.
On the New York Mercantile Exchange, gold futures gained $8.20
to end at $1,259.3 an ounce, topping its record close reached in
June. Crude futures were off 32 cents at $74.28 a barrel.
Treasury yields held steady after the government's sale of $33
billion in 3-year notes, awarded at a record low 0.79% rate.
The yield on the 10-year Treasury note (UST10Y), a measure used
in setting interest rates on mortgages and other consumer loans,
fell to 2.622% as its price rose.
More than two stocks were on the decline for each issue rising
on the New York Stock Exchange, where volume topped 410 million as
of 1:50 p.m. Eastern.
Usually slow during the summer, trading volume has been
particularly low of late, and did not show any immediate signs of
picking back up as traders returned from their vacations after the
Labor Day holiday.
On Wednesday, the Federal Reserve releases its so-called Beige
Book, offering a glimpse at regional economic activity, while on
Thursday the government releases its weekly count of those filing
initial claims for unemployment benefits.