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U.S. stocks lower as EU leaders meet; Dow Jones down 0.78%

Published 01/30/2012, 10:01 AM
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Investing.com - U.S. stocks were lower on Monday, as market sentiment waned after downbeat U.S. personal spending data while investors were cautious amid a key European Union summit in Brussels.

During early U.S. trade, the Dow Jones Industrial Average fell 0.78%, the S&P 500 index dropped 1%, while the Nasdaq Composite index declined 0.93%.

Sentiment was hit after official data showed that U.S. personal spending was flat in December, confounding expectations for a 0.2% gain. Personal spending for November rose by an unrevised 0.1%.

Meanwhile, delays in negotiations between Greece and its private creditors on a debt swap deal also weighed on market sentiment.

European Union leaders were expected to finalize discussions on a pact aimed at enforcing deficit control measures in the region and to sign off on a EUR500 billion permanent rescue fund to be set up this year.

Financial stocks were broadly lower as shares in Bank of America tumbled 2.47% and JP Morgan dropped 1.75%, while Goldman Sachs and Citigroup plummeted 1.72% and 1.43% respectively.

Goldman Sachs upgraded Citigroup to "buy" from "neutral," citing a clearer path for the bank to return capital to shareholders, and downgraded Bank of America to "neural" from "buy," saying it anticipates higher execution risk for the firm over the next 12-18 months.

Energy stocks also contributed to losses as shares in Chevron and Exxon Mobil retreated 1.67% and 1.17%, while Alpha Natural Resources plunged 3.46%.

On the upside, Thomas & Betts surged 22.67% after Swiss engineering group ABB announced it will acquire the U.S.-based electrical components maker for USD3.9 billion in cash.

Amylin was also sharply higher with shares climbing 16.53% after the FDA approved the diabetes drug Bydureon, developed by a partnership between Amylin and Alkermes.

Alkermes saw shares advance 1.57% after the news.

Across the Atlantic, European stock markets were sharply lower. The EURO STOXX 50 plunged 1.15%, France’s CAC 40 tumbled 1.27%, Germany's DAX plummeted 1.07%, while Britain's FTSE 100 declined 1.18%.

During the Asian trading session, Hong Kong's Hang Seng Index tumbled 1.3%, while Japan’s Nikkei 225 Index fell 0.54%.


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