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U.S. stocks slump on Europe fears; Dow Jones falls below 10,000

Published 05/25/2010, 11:00 AM
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Investing.com - U.S. stocks slumped on Tuesday ahead of a key report on U.S. consumer confidence, and amid fears over the euro zone sovereign debt crisis and rising political tensions on the Korean peninsula.

During early U.S. trade, the Dow Jones Industrial Average was down 2.23%, breaking below the key psychological level of 10,000 to hit 9,842.49; the S&P 500 index shed 2.32%; and the Nasdaq Composite index was down 2.59%.

Financial stocks were among the worst performers, with Citigroup Inc. shedding 3.44% and JP Morgan Chase dropping 1.97%.

The losses came on the heels of reports that the North Korean leader, Kim Jong Il, ordered his military to be on combat alert, shortly after South Korea officially blamed his regime for sinking of one of its warships in March.

Earlier in the day, the IMF urged Spain to press on with a major restructuring of its economy, including an overhaul of union-dominated labor markets and banking system, and progress on slashing budget deficits.

Across the Atlantic, stock markets also tumbled: France’s CAC 40 slipped 3.33%; Germany's DAX shed 2.66%; Britain's FTSE 100 was down 2.48%; and the EURO STOXX 50 slipped 3%.

Later Tuesday, a research group, the Conference Board, was set to publish a closely watched report on U.S. consumer confidence. The data, which is based on a survey of about 5,000 households, is an important signal of consumer spending.

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