Investing.com - U.S. stock markets came under heavy selling pressure after the open on Monday, as concerns over the debt crisis in the euro zone deepened, prompting investors to shun riskier assets.
During early U.S. trade, the Dow Jones Industrial Average tumbled 1.75%, the S&P 500 index plunged 1.7% while the Nasdaq Composite index sank 2.4%.
The yield on Spanish 10-year bonds rose to a record 7.57% on Monday, well above the 7% threshold widely considered unsustainable in the long term, amid growing fears that Spain will need a full bailout after the state of Murcia followed Valencia in requesting financial aid from Madrid over the weekend.
Spanish media reported that several others among Spain's 17 semi-autonomous regions are expected to follow, including the two biggest regions, Catalonia and Andalucia.
Meanwhile, fears over a Greek exit from the euro zone resurfaced, amid worries whether Athens can meet the conditions of its international bailout ahead of a meeting with the Troika on Tuesday.
The news prompted investors to shun riskier assets, such as stocks and commodities, and flock to traditional safe haven assets like the dollar and U.S. Treasuries.
Shares in the financial sector were sharply lower, tracking heavy losses in their global counterparts.
Wall Street investment bank Morgan Stanley saw shares sink 3%, Citigroup slumped 2.9%, while shares in Bank of America and JP Morgan lost 2.2% and 1.4% respectively.
Shares in raw material producers were lower, dragged down by the uncertain global outlook and falling commodity prices.
Oil giants Exxon Mobil and British Petroleum retreated 1.6% and 3.7% respectively, while miners BHP Billiton and Freeport McMoran Copper and Gold declined 3.8% and 4% respectively.
In earnings news, fast food giant McDonald’s saw shares slump 2.4% after saying second quarter net income fell 4.5% from a year earlier to USD1.35 billion.
Chief executive Don Thompson said the results reflected "the slowing global economy, persistent economic headwinds" and the company’s investments in its operations.
On the upside, U.S.-listed shares of Canadian energy firm Nexen surged 52% after it agreed to be acquired by Chinese oil major CNOOC for approximately USD15.1 billion.
Meanwhile, shares in NRG Energy shot up 8.6% after it agreed to acquire rival GenOn Energy in a deal valued at nearly USD1.7 billion, forming the largest U.S. independent power producer.
Shares in Texas Instruments tumbled 3.9% ahead of the release of its closely-watched second quarter earnings report due out before Monday’s opening bell.
Across the Atlantic, European stock markets were sharply lower. The EURO STOXX 50 tumbled 2.85%, France’s CAC 40 sank 2.9%, Germany's DAX plunged 3.45%, while Britain's FTSE 100 dropped 2.2%.
During the Asian trading session, Hong Kong's Hang Seng Index plunged 3%, while Japan’s Nikkei 225 slumped 1.9%.
Neither the euro zone nor the U.S were to release any significant economic indicators on Monday, so markets looked set to remain focused on developments in Europe.
During early U.S. trade, the Dow Jones Industrial Average tumbled 1.75%, the S&P 500 index plunged 1.7% while the Nasdaq Composite index sank 2.4%.
The yield on Spanish 10-year bonds rose to a record 7.57% on Monday, well above the 7% threshold widely considered unsustainable in the long term, amid growing fears that Spain will need a full bailout after the state of Murcia followed Valencia in requesting financial aid from Madrid over the weekend.
Spanish media reported that several others among Spain's 17 semi-autonomous regions are expected to follow, including the two biggest regions, Catalonia and Andalucia.
Meanwhile, fears over a Greek exit from the euro zone resurfaced, amid worries whether Athens can meet the conditions of its international bailout ahead of a meeting with the Troika on Tuesday.
The news prompted investors to shun riskier assets, such as stocks and commodities, and flock to traditional safe haven assets like the dollar and U.S. Treasuries.
Shares in the financial sector were sharply lower, tracking heavy losses in their global counterparts.
Wall Street investment bank Morgan Stanley saw shares sink 3%, Citigroup slumped 2.9%, while shares in Bank of America and JP Morgan lost 2.2% and 1.4% respectively.
Shares in raw material producers were lower, dragged down by the uncertain global outlook and falling commodity prices.
Oil giants Exxon Mobil and British Petroleum retreated 1.6% and 3.7% respectively, while miners BHP Billiton and Freeport McMoran Copper and Gold declined 3.8% and 4% respectively.
In earnings news, fast food giant McDonald’s saw shares slump 2.4% after saying second quarter net income fell 4.5% from a year earlier to USD1.35 billion.
Chief executive Don Thompson said the results reflected "the slowing global economy, persistent economic headwinds" and the company’s investments in its operations.
On the upside, U.S.-listed shares of Canadian energy firm Nexen surged 52% after it agreed to be acquired by Chinese oil major CNOOC for approximately USD15.1 billion.
Meanwhile, shares in NRG Energy shot up 8.6% after it agreed to acquire rival GenOn Energy in a deal valued at nearly USD1.7 billion, forming the largest U.S. independent power producer.
Shares in Texas Instruments tumbled 3.9% ahead of the release of its closely-watched second quarter earnings report due out before Monday’s opening bell.
Across the Atlantic, European stock markets were sharply lower. The EURO STOXX 50 tumbled 2.85%, France’s CAC 40 sank 2.9%, Germany's DAX plunged 3.45%, while Britain's FTSE 100 dropped 2.2%.
During the Asian trading session, Hong Kong's Hang Seng Index plunged 3%, while Japan’s Nikkei 225 slumped 1.9%.
Neither the euro zone nor the U.S were to release any significant economic indicators on Monday, so markets looked set to remain focused on developments in Europe.