December 10, 2013
Wall Street falls on weak data, Italy drags euro zone shares lower
US stocks opened the week's trading with a drop, after data showed a steep fall in orders for long-lasting manufactured goods last month.
The Dow Jones industrial average ended down 64.05 points, or 0.43 percent, at 14,946.46. The Standard & Poor's 500 Index was down 6.72 points, or 0.40 percent, at 1,656.78. The Nasdaq Composite Index was down 0.22 points, or 0.01 percent, at 3,657.57.
Italian stocks led euro zone shares lower as the risk of a new government crisis fuelled a selloff in companies exposed to Italian sovereign debt and posed risks to the country's still weak economy.
Italy's FTSE MIB share index was down 1.6 percent after members of Silvio Berlusconi's centre-right party warned they would bring down the government if the former premier is expelled from parliament over a recent conviction.
The threat of a government crisis raised the prospect of a new wave of political instability that could delay the country's economic reform and dash growing expectations for a pickup in the economy. Early signs of economic improvement have helped the FTSE MIB rise 6.8 percent in the last month, outperforming Germany's DAX and France's CAC.
Italian banks UniCredit and Intesa Sanpaolo , fell around 4 percent, as investors worried about their holdings of Italian sovereign bonds, which fell in value on the secondary market.
The two stocks were the biggest drag on the euro zone Euro STOXX 50 index, which was down 0.7 percent at 2,805.27 points.
The reaction in Italian banking stocks, which have risen 14.7 percent since the start of the year, was magnified by underlying concerns about some of their other assets, which will come under scrutiny in an upcoming review of euro zone banks to be carried out by the European Central Bank.
A recent improvement in data on the euro zone economic has helped the Euro STOXX 50 rise around 8 percent since the start of July, or more than twice as much as the US S&P 500.
Volume on the Euro STOXX 50 was thin at 27 percent of its 90-day average, partly because London financial markets were closed for a public holiday.
Meanwhile, the Nikkei average edged down in very thin trade as uncertainties over a planned sales tax hike and the US Federal Reserve's tapering kept many investors sidelined, while steady Asian stocks limited the downside for Japanese stocks.
The benchmark Nikkei shed 0.2 percent to 13,636.28 in choppy trade, after rising to as high as 13,741.49 and
falling to as low as 13,586.84 during the session. The broader Topix eased 0.1 percent to 1,140.00, with 1.59 billion shares changing hands, the second-lowest since mid-November.