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Overnight Markets: Wall Street falls on Italian election

by Himanshu Singh on Feb 26, 2013 at 03:05

Overnight Markets: Wall Street falls on Italian election

Wall Street declined on Monday, with the benchmark indexes registering their biggest drop since November, after partial election results in Italy showed strong position of groups opposed to the country's economic reforms and triggered fresh concerns about Europe's debt problems.

The Dow Jones industrial average dropped 216 points, or 1.55%, to 13,784 at the close. The Standard & Poor's 500 Index lost 28 points, or 1.83%, to 1,488. The Nasdaq Composite Index fell 46 points, or 1.44%, to 3,116.

Three TV projections indicated that Italy's centre-left coalition holds a slim lead over former Prime Minister Silvio Berlusconi's centre-right bloc in the election for the lower house of parliament. The resulting gridlock could lead to new elections and cast into doubt Italy's ability to pay down its debt.

Selling increased late in the trading session after the S&P 500 plunged below the 1,500 level, a significant support point.

Banks and other financial stocks were the worst performers amid concerns about the sector's exposure to Italy's massive debt.

In earnings news, Lowe's Companies Inc lost 4.8% after the home improvement retailer posted fourth-quarter earnings.

Chesapeake Energy Corp. slumped 6.8% after agreeing to sell a stake in an Oklahoma oilfield to China Petrochemical Corp. for less than one-third of its estimated value.

ITT Educational Services Inc. tumbled 17% after disclosing that US regulators subpoenaed documents related to private loan programs for its students.

 On the positive side, Barnes & Noble Inc shares shot up 11.5% after the bookseller's chairman offered to buy its declining retail business.

Amgen Inc shares climbed 3.1%, after rival Affymax issued a voluntary recall of its only drug, an anemia treatment that competes with Amgen's top-selling red blood cell booster, Epogen. Affymax lost 85.4%.

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