Stocks slipped Monday after Italian bond sales renewed fears over the health of the euro.
NEW YORK (AP) — The stock market fell Monday after a jump in Italy’s borrowing costs reminded investors of how much work remains to be done to contain Europe’s debt problems.
The Dow Jones industrial average lost nearly 75 points. Bank stocks fell the most. European markets also fell and the euro weakened against the dollar.
Major indexes closed higher last week as Greece and Italy moved to form new governments and took other decisive steps to get their debt troubles under control. However worrisome signs re-emerged Monday.
The Italian government had to pay 6.29 percent at an auction of five-year bonds, the highest rate since since 1997. Italy paid a much lower rate of 5.32 percent at a similar auction last month. That’s a sign investors are still concerned about Italy’s ability to repay its debts. Stocks tanked last Wednesday after key Italian borrowing rates jumped above 7 percent, a level widely seen as unsustainable.
Also Italy’s biggest bank, Unicredit, reported a $14.4 billion loss.
“The problems these countries are dealing with go well beyond their prime ministers,” said Dan Greenhaus, chief global strategist at the brokerage BTIG. “Italy didn’t get where it is in five minutes. And it’s not going to get out of where it is in five minutes. This is going to take months.”
The Dow fell 74.70 points, or 0.6 percent, to close at 12,078.98. Bank of America Corp. fell 2.6 percent and JPMorgan Chase & Co. fell 2.2 percent, the largest drops among the 30 large companies in the Dow.
The Standard & Poor’s 500 index fell 12.06 points, or 1 percent, to 1,251.79. The Nasdaq composite index fell 21.53, or 0.8 percent, to 2,657.22.
Three stocks fell for every one that rose on the New York Stock Exchange. Volume was very light at 3 billion shares.
Stocks have risen since early October on encouraging signs of progress in containing Europe’s debt crisis, stronger U.S. corporate earnings and better news on the U.S. economy. The S&P 500 has soared 13.7 percent since hitting its low for the year on Oct. 3.
That surge has drawn big investors back into the stock market and opened the door to a long line of companies waiting to go public. The flow of money from institutions into U.S. stock funds hit $7.3 billion last week, the third largest tally this year, according to fund tracker EPFR Global.
Angie’s List, a customer review website, Delphi Automotive and seven other companies are scheduled to go public this week. If they all wind up going through, it would be the biggest week for IPOs in four years, according to Renaissance Capital, an IPO advisory firm.
In corporate news, the airline Emirates placed an order for 50 Boeing 777s, one of the largest orders ever placed with the aircraft maker. Boeing Co. also picked up a new customer, Oman Air, which ordered six 787s. Boeing rose 1.5 percent.
J.C. Penney Co. fell 2.8 percent after reporting a quarterly loss. The department store operator said its results were weighed down by restructuring costs. The company also lowered its earnings outlook for the rest of the year.
Lowe’s Cos. rose 1.7 percent after the country’s second-largest home-improvement retailer reported revenue and earnings that beat analysts’ expectations.
The Dow has made gains in six of the past seven weeks, and is still up 1 percent for the month. The S&P 500 and the Nasdaq are slightly lower.