Investing.com - U.S. stocks dropped on Monday after electoral uncertainty in Italy fanned fears that a divided parliament or a change in leadership structure there may lead to an end of austerity measures put in place by past administrations and roil markets worldwide.
At the close of U.S. trading, the Dow Jones Industrial Average finished down 1.55%, the S&P 500 index ended down 1.83%, while the Nasdaq Composite index fell 1.44%.
Exit polls in Italy indicated that Silvio Berlusconi’s center-right party was poised to win the most votes in the Senate.
Preliminary results were expected by Tuesday, though fears of a victory for Berlusconi's party or even a divided parliament and another vote sent investors snapping up dollar positions and avoiding higher-yielding asset classes such as stocks.
A victory for Berlusconi's party could jeopardize the fate of austerity measures put in place by previous policymakers and possibly jeopardize the eurozone's recovery.
Elsewhere, market participants were eagerly awaiting Federal Reserve Chairman Ben Bernanke to deliver his semiannual testimony on monetary policy to the Senate Banking Committee on Tuesday and a subsequent address before the House Financial Services Committee on Wednesday.
Market talk that Bernanke will downplay concerns that the U.S. central bank's stimulus measures such as a USD85 billion monthly quantitative easing program will pump up inflation rates and swell asset bubbles failed to spark any appetite for risk.
Uncertainty as to whether the sell-off will lead to a correction or to another buying opportunity fueled the flight from stocks, which have risen in recent weeks due to better-than-expected fourth quarter earnings and improving economic indicators.
Leading Dow Jones Industrial Average performers included McDonalds, up 0.99%, Verizon Communications, up 0.75%, and Wal-Mart Stores, up 0.10%.
The Dow Jones Industrial Average's worst performers included Bank of America, down 3.58%, Caterpillar, down 2.58%, and Home Depot, down 2.50%.
European indices, meanwhile, finished higher.
After the close of European trade, the EURO STOXX 50 rose 0.83%, France's CAC 40 rose 0.41%, while Germany's DAX 30 finished up 1.45%. Meanwhile, in the U.K. the FTSE 100 finished up 0.31%.
The U.S. on Tuesday is to release a report on consumer confidence, as well as official data on new home sales, a leading indicator of economic health.
The U.S. is also to release industry data on house price inflation.
Markets will keep a close eye on Federal Reserve Chairman Ben Bernanke during his testimony on monetary policy before the Senate Banking Committee.
At the close of U.S. trading, the Dow Jones Industrial Average finished down 1.55%, the S&P 500 index ended down 1.83%, while the Nasdaq Composite index fell 1.44%.
Exit polls in Italy indicated that Silvio Berlusconi’s center-right party was poised to win the most votes in the Senate.
Preliminary results were expected by Tuesday, though fears of a victory for Berlusconi's party or even a divided parliament and another vote sent investors snapping up dollar positions and avoiding higher-yielding asset classes such as stocks.
A victory for Berlusconi's party could jeopardize the fate of austerity measures put in place by previous policymakers and possibly jeopardize the eurozone's recovery.
Elsewhere, market participants were eagerly awaiting Federal Reserve Chairman Ben Bernanke to deliver his semiannual testimony on monetary policy to the Senate Banking Committee on Tuesday and a subsequent address before the House Financial Services Committee on Wednesday.
Market talk that Bernanke will downplay concerns that the U.S. central bank's stimulus measures such as a USD85 billion monthly quantitative easing program will pump up inflation rates and swell asset bubbles failed to spark any appetite for risk.
Uncertainty as to whether the sell-off will lead to a correction or to another buying opportunity fueled the flight from stocks, which have risen in recent weeks due to better-than-expected fourth quarter earnings and improving economic indicators.
Leading Dow Jones Industrial Average performers included McDonalds, up 0.99%, Verizon Communications, up 0.75%, and Wal-Mart Stores, up 0.10%.
The Dow Jones Industrial Average's worst performers included Bank of America, down 3.58%, Caterpillar, down 2.58%, and Home Depot, down 2.50%.
European indices, meanwhile, finished higher.
After the close of European trade, the EURO STOXX 50 rose 0.83%, France's CAC 40 rose 0.41%, while Germany's DAX 30 finished up 1.45%. Meanwhile, in the U.K. the FTSE 100 finished up 0.31%.
The U.S. on Tuesday is to release a report on consumer confidence, as well as official data on new home sales, a leading indicator of economic health.
The U.S. is also to release industry data on house price inflation.
Markets will keep a close eye on Federal Reserve Chairman Ben Bernanke during his testimony on monetary policy before the Senate Banking Committee.