US stocks retreat on eurozone fears

2012-07-24 07:53

New York - US stocks skidded on Monday amid a global sell-off on renewed eurozone sovereign debt concerns that Spain was headed for a bailout and Greece could exit the eurozone.

Spain's borrowing costs struck highs considered unsustainable, sparking fears that the eurozone's fourth-largest economy may require a bailout.

"Growing anxiety over a potential bailout for Spain and a flare-up in Greek default and eurozone exit worries set off a global sell-off in equities today, with markets in the US also succumbing, but able to come off the worst levels of the day," said Charles Schwab & Co. analysts.

Stocks were mired in red from the opening bell, tracking declines in European markets.

The Dow Jones Industrial Average recovered from a loss of over 200 points to close at 12,721.46, down 101.11 points, putting in a second straight day in negative territory.

The S&P 500, a broad measure of the markets, fell 12.14 points to 1,350.52, while the tech-rich Nasdaq dived 35.15 points to 2,890.15.

The US economic calendar was bare.

Dow member McDonald's added to the gloom by revealing disappointing second-quarter earnings. The fast-food giant's shares plunged 2.9%.

Oilfield services giant Halliburton bucked the downturn, adding 2.4% after posting earnings that topped Wall Street estimates.

ExxonMobil lost 0.9% as oil futures prices fell more than 3.0%.

A massive Chinese-Canada takeover deal in the energy sector was in focus.

Chinese state-owned oil and gas giant CNOOC will buy Canadian oil company Nexen for $15.1bn, the two companies announced.

The cash deal, subject to regulatory approval, would be China's largest foreign commercial purchase to date.

CNOOC's US-traded shares dropped 4.3%, while Nexen's soared 51.8% to $25.90 on the New York Stock Exchange.

Apple slipped 0.1%. An appeals court on Monday sided with bankrupt photo pioneer Eastman Kodak by endorsing a US International Trade Commission move rejecting claims it infringed on two Apple patents. Kodak dropped 7.0% to 24 cents in over-the-counter trade.

The Wall Street rout extended Friday's losses spurred by worries about Spain's fiscal health. The Dow lost 0.9%.

Bond prices spiked higher. The 10-year Treasury yield dropped to 1.44% from 1.46% on Friday, while the 30-year fell to 2.51% from 2.55%.

Bond prices and yields move in opposite directions.