Investing.com - U.S. shares followed euro zone markets sharply lower as political uncertainty in the Netherlands and France combined with global growth worries to kick start the risk off trade.
At the close of U.S. trade, the Dow Jones Industrial Average fell 0.78%, the S&P 500 gave back 0.80%, while the Nasdaq Composite plunged 1.00%.
U.S. equities were hit by ongoing political uncertainty in the euro zone, after Dutch Prime Minister Mark Rutte’s government was forced to resign following failed budget negotiations.
In addition, French borrowing costs increased Monday, after President Nicolas Sarkozy poor performance against challenger Francois Hollande in the first round of the country’s presidential election.
Hollande stated he wants to renegotiate the euro zone’s fiscal pact in order to stimulate growth in the bloc, rather than enforcing strict austerity measures.
Meanwhile, worries over the economic outlook mounted after data showed that the euro zone's manufacturing output slumped to its lowest level since June 2009 this month, while its services sector fell to a five month low.
The decline was driven by poor performances in Germany and France, with manufacturing activity in Germany slowing to the lowest level in almost three years.
The weak data fuelled fears economic growth in the region will be hit by planned government austerity measures.
In other euro zone bearish news Monday, the Bank of Spain reported it believes that the country’s economy has entered a recession.
The central bank said gross domestic product contracted by 0.4% in the three months to March. That follows a 0.3% contraction in the fourth quarter, and zero growth in the third quarter of last year.
An index signaled that Chinese manufacturing may shrink for the sixth straight month in April fostering fears of a continuing global economic slowdown.
The Federal Open Market Committee begins a two day meeting Tuesday. They are likely to keep monetary policy on hold as the U.S. economy is signaling strength after record easing.
Apple slipped 0.02% as profit takers worried over shares perhaps climbing too fast in the face of the second quarter report due Tuesday.
Amylin Pharmaceuticals surged 12% after rejecting a buy out offer from Bristol Myers Squibb and stating it is seeking another suitor.
Check Point Software Technologies gave back 8% after missing analysts second quarter sales estimates.
Texas Instruments traded higher in the afterhours after reporting earnings of USD0.32 per share
At the close of European trade, the EURO STOXX 50 gave back 2.87%, France's CAC 40 plunged 2.83%, while Germany’s DAX spiraled down 3.36%. Meanwhile, in the U.K. the FTSE 100 dropped 1.85%.
Investors are awaiting U.S. consumer confidence, new home sales, Canadian core retail sales as well as a speech by Canadian central bank president Carney on Tuesday.
At the close of U.S. trade, the Dow Jones Industrial Average fell 0.78%, the S&P 500 gave back 0.80%, while the Nasdaq Composite plunged 1.00%.
U.S. equities were hit by ongoing political uncertainty in the euro zone, after Dutch Prime Minister Mark Rutte’s government was forced to resign following failed budget negotiations.
In addition, French borrowing costs increased Monday, after President Nicolas Sarkozy poor performance against challenger Francois Hollande in the first round of the country’s presidential election.
Hollande stated he wants to renegotiate the euro zone’s fiscal pact in order to stimulate growth in the bloc, rather than enforcing strict austerity measures.
Meanwhile, worries over the economic outlook mounted after data showed that the euro zone's manufacturing output slumped to its lowest level since June 2009 this month, while its services sector fell to a five month low.
The decline was driven by poor performances in Germany and France, with manufacturing activity in Germany slowing to the lowest level in almost three years.
The weak data fuelled fears economic growth in the region will be hit by planned government austerity measures.
In other euro zone bearish news Monday, the Bank of Spain reported it believes that the country’s economy has entered a recession.
The central bank said gross domestic product contracted by 0.4% in the three months to March. That follows a 0.3% contraction in the fourth quarter, and zero growth in the third quarter of last year.
An index signaled that Chinese manufacturing may shrink for the sixth straight month in April fostering fears of a continuing global economic slowdown.
The Federal Open Market Committee begins a two day meeting Tuesday. They are likely to keep monetary policy on hold as the U.S. economy is signaling strength after record easing.
Apple slipped 0.02% as profit takers worried over shares perhaps climbing too fast in the face of the second quarter report due Tuesday.
Amylin Pharmaceuticals surged 12% after rejecting a buy out offer from Bristol Myers Squibb and stating it is seeking another suitor.
Check Point Software Technologies gave back 8% after missing analysts second quarter sales estimates.
Texas Instruments traded higher in the afterhours after reporting earnings of USD0.32 per share
At the close of European trade, the EURO STOXX 50 gave back 2.87%, France's CAC 40 plunged 2.83%, while Germany’s DAX spiraled down 3.36%. Meanwhile, in the U.K. the FTSE 100 dropped 1.85%.
Investors are awaiting U.S. consumer confidence, new home sales, Canadian core retail sales as well as a speech by Canadian central bank president Carney on Tuesday.