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US STOCKS-Europe's deepening crisis drags Wall St lower
May 30, 2012 / 8:38 PM / 6 years ago

US STOCKS-Europe's deepening crisis drags Wall St lower

* 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 1.3 pct, S&P 1.4 pct, Nasdaq 1.2 pct


    By Rodrigo Campos	
    NEW YORK, May 30 (Reuters) - U.S. stocks tumbled on
Wednesday as surging bond yields in Spain and Italy ratcheted up
tensions in financial markets about Europe's ability to solve
its growing debt crisis.	
    Angst over Europe drove investors away from risky assets and
into safe havens. U.S. Treasury benchmark yields fell to their
lowest in at least 60 years, prices for crude fell more than 3
percent and the euro dropped below $1.24 to a 23-month low.	
    The S&P 500 has fallen nearly 6 percent in May, heading for
its worst monthly performance since September as traders focused
on Europe. However, U.S. data later in the week, including
first-quarter gross domestic product and monthly payrolls, could
delink Wall Street from overseas headlines.	
    Yields rose sharply at an Italian sale of five- and 10-year
debt, and investors worried about Spain's plans to raise new
funds to shore up its banks even as borrowing costs rose there.
 	
    "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."	
    Adding to worries was Greece's upcoming election, which
could determine if the country will stay or not in the euro
zone. 	
    More than six issues fell on the New York Stock Exchange for
every one that rose. The CBOE volatility index, a gauge
of market anxiety, jumped 14.8 percent, its largest daily gain
in almost three months.	
    The Dow Jones industrial average lost 160.83 points,
or 1.28 percent, to 12,419.86. The S&P 500 Index dropped
19.10 points, or 1.43 percent, to 1,313.32. The Nasdaq Composite
 fell 33.63 points, or 1.17 percent, to 2,837.36. 	
    Facebook shares briefly dropped below $28 to trade
more than $10 below their initial public offering price. Shares
closed down 2.3 percent at $28.19, their sixth decline in eight
days of trading.	
    Energy was the worst performing of the top 10 S&P
sectors, down 3 percent, while U.S. crude futures fell
3.5 percent. Oil field service company Halliburton Co 
fell 5.2 percent to $30.36.	
    The PHLX housing sector index dropped 4.1 percent
after U.S. economic data showed contracts of home resales
unexpectedly fell in April to a four-month low, dealing a blow
to optimism the housing sector may have hit a bottom.
    	
    U.S.-traded shares of Research In Motion  
fell 7.8 percent to $10.35 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. 	
    Shares of Booz Allen Hamilton jumped 13.3 percent to
$16.86 after the government consulting 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. Shares
closed down 19.8 percent at $8.89. 	
    About 6.3 billion shares changed hands on the New York Stock
Exchange, the Nasdaq and Amex, below the year-to-date average of
about 6.81 billion shares.

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