Wall Street falls on Italy political turmoil
The S&P 500 and the Dow Jones Industrial Average fell more than 1 percent on Tuesday as political turmoil in Italy sparked concerns about the stability of the euro zone.
Italy has been unable to assemble a coalition government since inconclusive elections in March, which saw the rise of anti-establishment parties that support leaving the euro. The most recent nominee for prime minister failed to secure support from the country`s major political parties.
The political crisis in Rome, and the threat to the euro project it represents, triggered a rush to traditional safe havens like U.S. debt, pulling down U.S. 10-year bond yields
The market`s main measure of short-term volatility, the CBOE Volatility index <.vix>, spiked to its highest level since April 25.
"The direct connection between the Italian government and the S&P 500 is tenuous, but it indirectly reminds people of geopolitical uncertainty," said Ed Keon, chief investment officer of QMA in Newark, New Jersey.
The Dow Jones Industrial Average <.dji> fell 376.91 points, or 1.52 percent, to 24,376.18, the S&P 500 <.spx> lost 30.88 points, or 1.13 percent, to 2,690.45 and the Nasdaq Composite <.ixic> dropped 36.31 points, or 0.49 percent, to 7,397.54.
Shares of large U.S. banks were also pressured by downbeat guidance from JPMorgan Chase & Co
JPMorgan Chase shares fell 4.5 percent while Morgan Stanley shares dropped 6.0 percent. Morgan Stanley had the biggest percentage decline among S&P 500 stocks.
Shares of energy companies were also led lower by a drop in U.S. crude oil futures
Declining issues outnumbered advancing ones on the NYSE by a 1.82-to-1 ratio; on Nasdaq, a 1.95-to-1 ratio favored decliners.
The S&P 500 posted 7 new 52-week highs and 12 new lows; the Nasdaq Composite recorded 87 new highs and 48 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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