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Stocks Close Near Lows, Weighted by Financials

Stocks tumbled Monday, as some promising earnings reports failed to counterbalance continued concerns about European sovereign debt. Gregg Greenberg reviews the day in The Real Story.
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NEW YORK (

TheStreet

) -- Blue-chips stocks stumbled to a triple-digit decline Monday, pressured by sluggish financial shares and persisting fears about

European sovereign debt.

The

Dow Jones Industrial Average

closed down 104 points, or 1%, to 9908, the first time it close below 10,000 since November. The

S&P 500

shed 9 points, or 0.9%, to 1057 and the

Nasdaq

fell 15 points, or 0.7%, to 2126.

"Although we maintain many of our more constructive views on markets -- the global recovery remains intact as per recent encouraging data, corporate earnings are strong, and valuations undemanding -- it also appears that the shadow cast over markets by European sovereign risk is unlikely to lift soon," said UBS economist Larry Hatheway.

>>Five Value Stocks That Defy Market Decline

Over the weekend, leaders from the Group of Seven met to allay fears about European debt levels.

U.S. Treasury Secretary Timothy Geithner, meanwhile, insisted the U.S. will "never lose" its AAA credit rating and said global investors would always seek the safe haven of U.S. Treasuries in times of crisis.

Geithner's statement will be put to test as soon as Tuesday, as the U.S. Treasury prepares to auction $81 billion of government securities this week.

The benchmark 10-year Treasury note weakened 1/32, lifting the yield to 3.573%.

On an otherwise downbeat day, housing sector stocks served as a bright spot with the Philadelphia Housing Sector Index up 0.8%.

Pulte Homes

(PHM) - Get Report

improved 2.3% ahead of its fourth-quarter earnings release due Tuesday.

Home improvement retailer

Home Depot

(HD) - Get Report

led the Dow, helped by an upgrade to overweight from equal weight at Morgan Stanley. Shares traded 2.2% higher to $28.59.

Chip-sector stocks broadly experienced a less steep decline than most, as the Philadelphia Semiconductor Index went 0.4% lower.

But that wasn't enough to outweigh declines, led chiefly by weakness in the big-cap financial sector.

Bank of America

(BAC) - Get Report

topped the Dow's worst performers, sliding 3.5%.

Travelers

(TRV) - Get Report

,

American Express

TheStreet Recommends

(AXP) - Get Report

and

JPMorgan Chase

(JPM) - Get Report

also lost ground on the blue-chip average.

Hasbro

(HAS) - Get Report

was one of the

New York Stock Exchange's

highest performers after it easily beat estimates with earnings that rose 77%. Shares traded 12.7% higher, to $34.71.

Shares of

Citigroup

(C) - Get Report

, Bank of America and

Ford Motor

(F) - Get Report

were again seeing heavy trading on the NYSE, which had a listed volume of nearly 4.1 billion.

CVS

(CVS) - Get Report

reported

fourth-quarter earnings

that beat analysts' estimates. Its stock gained 5.3%, to $32.72.

Shares of

CIT Group

(CIT) - Get Report

gave up gains, sinking 0.5%. The commercial lender earlier named former Merrill Lynch chief executive John Thain as its new chairman and CEO.

After the close of trading,

Electronic Arts

(ERTS)

said its third-quarter earnings came two cents ahead of Street expectations of 31 cents a share. Still, shares fell in extended trading on a weaker-than-expected fourth-quarter outlook.

The greenback fell against a basket of currencies, with the dollar index lower by 0.1%.

In commodity markets, crude oil for March delivery settled at $71.89 a barrel after adding 70 cents. The most actively traded April

gold contract added $13.40 to settle at $1,066.20 an ounce.

Overseas, Hong Kong's Hang Seng was lower by 0.6%, and Japan's Nikkei was down by 1.1%. The FTSE in London was 0.6% higher, and the DAX in Frankfurt was up 0.9%.

-- Written by Melinda Peer and Sung Moss in New York

.