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Stocks fall sharply as Europe worries deepen

 Traders work on the floor of the New York Stock Exchange, Tuesday, Sept. 6, 2011, in New York. (AP Photo/Henny Ray Abrams)
 Christopher Culhane of Barclays Capital works on the floor of the New York Stock Exchange, Tuesday, Sept. 6, 2011, in New York. (AP Photo/Henny Ray A...

Wall Street

Traders work on the floor of the New York Stock Exchange, Tuesday, Sept. 6, 2011, in New York. (AP Photo/Henny Ray Abrams)

Wall Street

Christopher Culhane of Barclays Capital works on the floor of the New York Stock Exchange, Tuesday, Sept. 6, 2011, in New York. (AP Photo/Henny Ray A...

Stocks fell sharply Tuesday as worries deepened about Europe's debt crisis and the weak U.S. economy. The yield on the 10-year Treasury note fell near a record low and gold rose as investors sought safety.
The Dow Jones Industrial average was down 211 points, or 1.9 percent, at 11,029 at 11:15 a.m. It had been down as many as 307 points earlier. All 30 stocks that make up the average fell.
The S&P 500 lost 23, or 2 percent, to 1,150. The Nasdaq composite fell 43, or 1.7 percent, to 2,437.
Bank stocks fell more than the overall market. Federal regulators filed lawsuits late Friday against 17 major banks, saying they sold Fannie Mae and Freddie Mac billions of dollars worth of mortgage-backed securities that lost value when the housing market collapsed. Bank of America Corp. lost 5 percent. Wells Fargo & Co. and Goldman Sachs fell 3 percent.
The losses came after steep declines in European indexes. The Stoxx 600 Europe index fell 4.1 percent on Monday because of concerns that Europe's debt problems could slow growth around the world. The index fell another 1.4 percent Tuesday. U.S. markets were closed Monday for Labor Day.
September is historically the worst month for the stock market. Traders expect the trend to hold true this year as uncertainty continues over Europe's debt crisis and the stagnating U.S. economy. The government reported Friday that there was no job growth in the U.S. last month. It was the worst reading on the jobs market since September 2010.
This week Italian lawmakers will vote on an austerity package needed to shore up that country's finances, and in the U.S. President Barack Obama is expected to announce plans for encouraging job growth in a televised address Thursday evening.
"Until there is clarity on where the economy and European governments are headed, the market will continue to question whether the possibility of a recession is fully priced in," said Quincy Krosby, the market strategist at Prudential Financial.
Assets that traders see as safer bets during a weak economy rose sharply. The yield on the 10-year Treasury note fell to 1.97 percent. On Monday the yield fell to 1.91 percent, the lowest since the Federal Reserve Bank of St. Louis began keeping daily records in 1962. Bond yields fall when their prices rise.
In a sign that investors expect the economy to slow, oil futures dropped $2, or 2 percent, to $84.44 a barrel.
A relatively strong report on U.S. service companies did little to stem the losses. The Institute for Supply Management said the service sector grew more than analysts had expected in August. The growth rate of that part of the economy, which employs nearly 90 percent of America's work force, fell the three previous months.


Updated : 2021-03-09 00:11 GMT+08:00