Stocks Start Week With Stumble
NEW YORK (TheStreet) -- The major U.S. stock averages fell Monday with investors ill at ease about the possible outcome of a two-day meeting between European finance ministers and the World Bank's downgrade of China and East Asia's growth prospects.
Technology was again a headwind with Apple (AAPL) losing more than 2%.
European finance ministers are meeting in Luxembourg on Monday and Tuesday. A potential financial aid request from Spain and the country's harsh 2013 budget plans were expected to be the focus as the permanent European Stability Mechanism goes into effect Monday.
"The decision to request financial assistance rests entirely with Spain," said Michala Marcussen, head of global economics, at Societe Generale. "The longer Spain delays, however, the greater the market pressure is likely to become."The Dow Jones Industrial Average shed nearly 27 points, or 0.19%, to close at 13,584. The blue-chip index, which snapped a three-day winning streak, is still up 11.3% so far in 2012. Losers outpaced winners within the Dow, 18 to 11 with Coca-Cola (KO) finishing flat. The biggest percentage decliners were Hewlett-Packard (HPQ), Home Depot (HD), Verizon (VZ), and Walt Disney (DIS). The biggest Dow gainers were American Express (AXP), McDonald's (MCD), and UnitedHealth (UNH). Cisco shares closed up 0.21% after Reuters reported that the networking giant has severed its sales partnership with China-based ZTE following an internal investigation that came after a Reuters report several months ago alleging that ZTE was selling banned computer equipment from Cisco and other U.S. firms to Iran's largest telecom company. The U.S. House of Representatives Intelligence Committee warned Monday that ZTE and its Chinese telecom equipment peer Huawei Technologies pose a serious security threat to the United States. Shares of UnitedHealth, the newest addition to the Dow, rose 0.82% after the company agreed to purchase 90% of Brazilian health care provider Amil Participacoes for roughly $4.3 billion. Walt Disney shares fell 1.2% after the entertainment company was downgraded to average from above average by analysts at Caris, who said that the shares look fully valued. The S&P 500 fell more than 5 points, or 0.35%, to settle at 1456, while the Nasdaq saw the steepest decline, dropping nearly 24 points, or 0.76%, to finish at 3112. The weakest sectors in the broad market was technology, consumer cyclicals and conglomerates. The only groups in the green were transportation and utilities. Volume totaled 2.32 billion on the Big Board and 1.19 billion on the Nasdaq. Losers ran ahead of winners by a 1.5-to-1 ratio on the New York Stock Exchange, and 1.8-to-1 ratio on the Nasdaq.
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