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Overnight Markets: S&P 500 posts biggest drop since November on Europe

by Himanshu Singh on Feb 05, 2013 at 03:58

Overnight Markets: S&P 500 posts biggest drop since November on Europe

US stocks declined on Monday, with the S&P 500 registering its worst day since November, amid renewed concern that the eurozone crisis may intensify.

The Dow Jones industrial average was down 130 points, or 0.93%, at 13,880. The Standard & Poor's 500 Index was down 17 points, or 1.15%, at 1,496. The Nasdaq Composite Index was down 48 points, or 1.51%, at 3,131.

Shares fell after Spanish and Italian bond yields increased, renewing worries about the eurozone's sovereign debt crisis.

Spain's prime minister faced calls to resign over a corruption scandal, while a probe of alleged misconduct involving an Italian bank was expected to widen three weeks before a national election.

Adding to market pressure, data from the US Commerce Department showed overall factory orders for December were below economists' expectations.

McGraw-Hill lost 13.8% after news the US Justice Department plans to sue Standard & Poor's, a unit of McGraw-Hill, over its mortgage bond ratings.

Chevron and Wal-Mart were among the biggest drags on the Dow after analyst downgrades. Chevron dipped 1.1%, while Wal-Mart Stores Inc shed 1.2%.

On the positive side, shares of household products company Clorox increased 0.7% after quarterly profit beat analysts' estimates as a severe flu season boosted sales of disinfecting wipes.

In deal news, Oracle Corp agreed to acquire network equipment company Acme Packet Inc for $1.7 billion net of cash. Shares of Oracle were down 3% while Acme Packet shot up 23.7%.

Shares of Herbalife Ltd ended up 1.3%, recovering its losses ahead of the close, after the Federal Trade Commission corrected an erroneous statement that said the company was the subject of a law-enforcement probe.

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