NEW YORK (AP) — Stocks edged lower on Wall Street Monday, erasing an early rally, following signs that Italy could be headed for political gridlock.
The Dow Jones industrial average was down 51 points, or 0.4 percent, to 13,950 as of 12:06 p.m. EST. It had been up as much as 81 points. The Standard & Poor’s 500 fell five points, or 0.3 percent, to 1,510 and the Nasdaq composite dropped 3, or 0.1 percent, to 3,158.
Stocks rallied in the early going as exit polls showed that a center-left coalition in Italy that favored economic reforms in the euro region’s third-largest economy was leading in the polls. That gain evaporated after another poll showed that the elections appear to be heading toward gridlock. Stocks slumped last year on concern that Italy would become engulfed in the European government debt crisis.
“The Italian elections have implications for the credit markets,” said Quincy Krosby. “The ultimate worry is that the credit markets start reacting.”
The yield on Italy’s 10-year government bond edged up to 4.43 percent as investors sold them. The country’s benchmark stock index, the FSTE MIB, was up just 0.7 percent, giving up an early gain of 4 percent.
On the New York Stock Exchange, Barnes & Noble rose $1.33, or 10 percent, to $14.85 after founder and chairman Leonard Riggio told the bookseller he is going to try to buy the company’s retail business. Hertz advanced $1.15 to $19.87, despite posting a fourth-quarter loss, after the rental car company said that pricing improved, volume rose and it cut costs.
Stocks gained even with the threat of across-the-board automatic government spending cuts less than a week away. Some $85 billion in cuts will occur over the next seven months starting March 1, with more in following years if lawmakers can’t come to an agreement on how to reduce spending in a more measured and targeted manner.
The Standard & Poor’s 500 had its first weekly decline of the year last week. Investors sent stocks plunging after minutes from the Federal Reserve’s latest policy meeting revealed disagreement over how long to keep buying bonds in an effort to boost the economy.
Many analysts say the Fed’s bond-buying program and the resulting low interest rates have been a big driver behind this year’s stock rally, which lifted indexes to their highest levels since 2007.
Japanese stocks surged on reports that the prime minister’s pick for central bank governor will be a strong advocate of loose monetary policy aimed at reviving the moribund economy. The Nikkei 225 gained 2.4 percent to end at 11,662.52
European stocks also advanced, but gave back much of their early gains. Benchmark indexes were up 0.4 percent in France, 1.5 percent in Germany and 0.8 percent in Spain. Britain’s index was up just 0.3 percent after Moody’s stripped the country late Friday of its triple-A credit rating.
The yield on the U.S. 10-year Treasury note, which moves inversely to its price, fell two basis points to 1.93 percent.
Among other stocks making big moves:
— Drugmaker Affymax plunged $14, or 85 percent, to $2.43 after the company recalled its anemia drug following severe allergic reactions and the deaths of some kidney dialysis patients.
—Mead Johnson fell $2.54 to $76.45 after the company said that a new regulation in Hong Kong could affect the company’s sales there as well as in mainland China.
More Related Stories
- Mississippi could begin prosecuting women for miscarriages
- Teenage girl claims she was beaten up for looking like Taylor Swift
- UK Military: London attack victim was a "model soldier"
- Billionaire hedge funder: Babies, breast-feeding "kill" focus, keep women from succeeding
- "Bookless library" set to open in Texas
- 2 more arrested in London attacks
- Glenn Beck: CNN interview with atheist tornado survivor was a setup!
- Incoming BBC news director on journalism gender gap: "We can do better"
- Illegal construction, shoddy materials at fault in Bangladesh factory disaster
- Ahead of Obama's speech, U.S. acknowledges four American drone killings
- Must-see morning clip: Bill O'Reilly visits "The Daily Show"
- Lawsuit alleges anti-gay hiring practices at ExxonMobil
- Boy Scouts poised to vote, still greatly divided on gay youth
- House supporters of KXL received $56m from fossil fuel industry
- 80-year-old becomes oldest to climb Mount Everest
- Before FBI shooting man implicated self, Tsarnaev in triple murder
- Paul McCartney backs Pussy Riot
- UK emergency committee convenes after attack
- Brave scout leader tried to reason with London attackers
- If Alex Pareene were a cable news executive...
- El Salvador court delays ruling on abortion case while woman's life hangs in the balance
Featured Slide Shows
The week in 10 picsclose X
- 1 of 11
Credit: AP/LM Otero
Credit: AP/Matt Rourke
Credit: AP/Jenny Aicher
Credit: AP/Molly Riley
Credit: AP/J. Scott Applewhite
Credit: AP/Carolyn Kaster
Credit: AP/Las Vegas Review-Journal/Jeff Scheid
Credit: AP/NASA/Chris Hadfield
Credit: AP/Jacquelyn Martin
Credit: AP/The Duluth News-Tribune/Clint Austin
Recent Slide Shows
- 1 of 11