US stocks fell on Monday led by bank shares in response to Europe’s intensifying debt crisis and concerns over an insider trading investigation in the US.
The Dow Jones industrial average declined 25 points, or 0.2%, to 11,179. The Standard Poor’s 500 Index dipped two points, or 0.2% percent, to 1,198. But the Nasdaq Composite Index gained 14 points, or 0.6%, to 2,532.
Equities followed the euro’s fall against the US dollar after Ireland’s deeply unpopular government began to unravel on Monday in the backdrop of an agreed-on bailout of the country. The junior coalition party, the Greens, withdrew their support from Prime Minister Brian Cowen’s cabinet a day after the rescue deal, raising doubt about the adoption of its deficit-cutting budget, usually a condition for EU/IMF aid disbursements.
Investors fear the delay of the bailout could intensify the crisis, which may affect other European countries, raising the specter of losses by exposed US banks. The KBW bank index lost 1.5% and Dow component JPMorgan Chase fell 2.3%. US-listed shares of Bank of Ireland tumbled 16.9%, and those of Allied Irish Banks lost 9.8%.
A broad insider trading probe in the US added to the concerns hitting shares of large brokerages and Goldman Sachs fell 3.4%.
Health insurers outperformed the broader market after new rules aimed at ensuring more customer dollars go towards medical care were finalised on Monday. Humana rose 4.1% and Coventry Health Care added 3.1%.
Hewlett-Packard, which raised its fiscal 2011 revenue and earnings forecasts after closing bell, added 1.9% in extended trading.
In current trading, Asian stocks declined on Tuesday amid speculation a EU bailout of the Irish government will fail to halt the region’s sovereign-debt crisis.
The MSCI Asia Pacific excluding Japan Index slipped 0.7% to 462 as of 10:24 a.m. in Hong Kong. Australia’s SP/ASX 200 Index dropped 0.6% and New Zealand’s NZX 50 Index declined 0.7%. South Korea’sKospi Index slipped 0.5%. China’s Shanghai Composite Index sank 1.7%. Hong Kong’s Hang Seng Index fell 1.4%. Japanese markets are closed for a holiday.
In corporate news, Hyundai Motor dropped 3.9% in Seoul. Billabong International declined 1.1% in Sydney. BHP Billiton lost 1% as copper and oil futures slid in New York yesterday.