By Kate Gibson
U.S. stocks on Tuesday fell for the first session in five, with
investors seeking safer havens to plant their money as worries
flared 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.
After tallying its best pre-Labor Day week since 1990, the Dow
Jones Industrial Average (DJI) on Tuesday fell 95.96 points, or
0.9%, to 10,351.97, with 26 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 0.9%, 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 11.72 points, or 1.1%, to
1,092.78, with financials weighing the most heavily among its 10
industry groups. Lincoln National Corp. (LNC), off 4.1%, 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 5.8% 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
6.2% after the database-software titan said it hired Mark Hurd, the
former Hewlett-Packard Co. (HPQ) chief, as one of its
presidents.
On Tuesday afternoon, H-P filed a lawsuit against Hurd, claiming
he had broken a nondisclosure agreement, according to a report on
The Wall Street Journal's website.
The Nasdaq Composite Index (RIXF) slid 22.8 points, or 1%, to
2,210.95.
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 shed 51 cents to end at $74.09 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 2.600% as its price rose.
Three stocks fell for each issue on the rise on the New York
Stock Exchange, where volume neared 542 million as of 3:20 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.
U.S. stocks on Friday tallied their first positive weekly
showing since early August, with the Dow up 2.9% for the week as it
edged back into positive turf for the year.