Stocks Slip As European Protests Worsen Debt Fears
Stocks slipped Wednesday as protests against austerity measures in Europe brought new worries about the region's financial system.
The dollar fell further against other currencies on anticipation of more action by the Federal Reserve to push U.S. interest rates down. Gold continued to climb past $1,300.
European markets fell as demonstrators gathered in Brussels, Spain and Ireland to protest austerity measures aimed at preventing another fiscal crisis that required a bailout of Greece earlier this year. The protests raised concerns that countries like Spain will not be able to implement policies required to heal their bloated public finances.
Kate Warne, investment strategist at Edward Jones in St. Louis, said the protests in Ireland, Spain and France suggest those countries will have trouble implementing austerity measures and that that's spooked markets there.
"Governments will have more difficulty making cuts to get their budgets in order," she said.
U.S. stocks had swooned this spring as a fiscal crisis in Greece appeared to be spreading to other weak European economies like Portugal and Spain. A relative calm in European markets since then has allowed U.S. stocks to rise sharply.
Schlumberger Ltd., Occidental Petroleum Corp. and other companies rose after the price of crude oil jumped on news that inventories fell last week. Benchmark crude for November delivery rose $1.68 to settle at $77.86 a barrel on the New York Mercantile Exchange.
Wednesday's decline in U.S. stocks marked another pause in a monthlong rally that has made this September one of the strongest for U.S. stocks in history.
With only two trading days left this month, the Dow Jones industrial average is on track for its best September since 1939 with a gain of 8 percent so far. It's still up only 3.8 percent for the year.
Trading was relatively subdued with no major economic reports or corporate earnings due out Wednesday.
The Dow Jones industrial average fell 32.74, or 0.3 percent, to 10,842.40 in late afternoon trading.
The Standard & Poor's 500 index slipped 4.05, or 0.4 percent, to 1,143.65, and the Nasdaq composite index fell 6.71, or 0.3 percent, to 2,372.88.
Bond prices edged lower. The yield on the 10-year Treasury note edged up to 2.51 percent from 2.47 percent late Tuesday.
There's a growing certainty within the bond market that the Federal Reserve will attempt to spur economic activity through pushing long-term interest rates down further. To do that, the Fed would buy more Treasurys, lifting bond prices and lowering yields.
Schlumberger rose $1.43 to $61.72, while Occidental Petroleum rose $1.30 to $76.81.
Gold fell rose $2 to $1,310.30, a day after settling above $1,300 for the first time.
In currencies, the dollar fell to 83.60 yen from 83.93 yen late Tuesday in New York. The euro rose as high as $1.3638 in European trading before settling back to $1.3628.
Rising stocks narrowly outpaced falling ones on the New York Stock Exchange, where volume came to 670 million shares.
(Copyright 2010 by The Associated Press. All Rights Reserved.)
