May 30, 2012 / 7:13 PM / 5 years ago

US STOCKS-Wall St slides on rising Europe worries

* Energy shares track oil prices lower
    * Spanish, Italian yields rise on euro zone concerns
    * U.S. housing sector gauge falls to 4-month low
    * Indexes off: Dow 1.2 pct, S&P 1.3 pct, Nasdaq 1 pct


    By Rodrigo Campos	
    NEW YORK, May 30 (Reuters) - Rising bond yields in Italy and
a bank crisis in Spain dragged Wall Street lower on Wednesday as
Europe's financial woes continued to dictate the direction of
U.S. stocks.	
    Angst over Europe's outlook drove investors from risky
investments into safe-haven assets. U.S. Treasury benchmark
yields fell to a 60-year low, prices for crude were down more
than 3 percent and the euro fell below $1.24 to a 23-month low.	
    The S&P 500 was down nearly 6 percent in May, headed for its
worst monthly performance since September.	
    Yields rose sharply at an Italian sale of five- and 10-year
debt, and investors worried about Spain's plans to raise new
funds as that country's borrowing costs also rose. Adding to
worries were Greece's upcoming election, which could determine
if the country will stay in the euro zone or leave.
 	
    The CBOE volatility index, a gauge of market anxiety,
jumped 10 percent to 23.	
    "You're seeing the deterioration in Spain gain magnitude and
that is worrisome because it involves a larger bailout (than
Greece's) and far more capital to alleviate banking problems,"
said Quincy Krosby, market strategist at Prudential Financial in
Newark, New Jersey.	
    "Traders and long-term investors believe Europeans are
working on solutions. But the ultimate question is will capital
markets give them the time before a liquidity issue becomes a
solvency issue."	
    The Dow Jones industrial average fell 145.43 points,
or 1.16 percent, to 12,435.26. The S&P 500 Index lost
16.88 points, or 1.27 percent, to 1,315.54. The Nasdaq Composite
 dropped 29.01 points, or 1.01 percent, to 2,841.98. 	
    Energy was the worst performing of the top 10 S&P
sectors, down 3 percent while U.S. crude futures fell 3.4
percent. Oil field service company Halliburton Co fell
5.5 percent to $30.25.	
    U.S.-traded shares of Research In Motion  
fell 7.4 percent to $10.40 after the BlackBerry maker warned it
would likely report a quarterly operating loss. Analysts cut
their price targets on RIM shares and said the odds of a
turnaround at the company are fading fast. 	
    Shares of Booz Allen Hamilton jumped 12.9 percent to
$16.80 after the government consultancy firm reported a
stronger-than-expected quarterly profit. 	
    Pep Boys Manny, Moe & Jack lost a fifth of its
market value after private equity firm Gores Group walked away
from a $791 million deal to buy the auto parts retailer.
 	
    U.S. economic data showed contracts to purchase previously
owned U.S. homes unexpectedly fell in April to a four-month low,
dealing a blow to optimism the housing sector may have hit a
bottom. 	
    The PHLX housing sector index dropped 3.5 percent.

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