Dow Closes Below 10,000

NEW YORK – The Dow Jones industrial average closed below 10,000 for the first time in three months Monday on nagging concerns about debt loads in Europe.

The market's major indexes have traded erratically lately as investors try to determine whether a global economic recovery is sustainable. Traders are still grappling with concerns that some European countries, such as Greece, Portugal and Spain, might not be able to handle their mounting debt. Stocks have also been hurt by China's plans to limit economic growth and the Obama administration's proposed rules to restrict trading by large financial institutions.

Dow component Home Depot Inc (HD) added support, rising 1.5 percent to $28.41 before the bell after Morgan Stanley upgraded it to "overweight" from "equal-weight" and added it to the brokerage's "Best Ideas" list.

Over the weekend, European finance ministers tried to assure their counterparts in the Group of Seven industrialized nations that the euro zone's debt crisis is under control. They said they would make sure that Greece sticks with its budget-cutting plans.

Worries about Greece's financial problems and their potential to spread to other euro zone countries or beyond has taken the steam out of Wall Street's rally in recent weeks.

"It's difficult enough for investors to digest when companies can't meet obligations. When countries can't meet their obligations, it sends more pronounced shivers through the market," said Andre Bakhos, president of Princeton Financial Group in North Brunswick, New Jersey.

"It hurts sentiment in the fact that the underlying global fundamentals remain shaky."

Although earnings season has largely taken a backseat to debt concerns, better-than-expected quarterly results from CVS Caremark (CVS) and Hasbro (HAS) could buoy the market. Shares of CVS were up 3.2 percent to $32.07 in premarket trade, and Hasbro gained 9.1 percent to $33.60.

The Dow fell 103.84, or 1 percent, to 9,908.39. On Thursday, the Dow traded below the psychological barrier of 10,000 for the first time since November. It hadn't closed below that mark since Nov. 4, 2009.

The broader Standard & Poor's 500 index fell 9.45, or 0.9 percent, to 1,056.74, while the Nasdaq composite index fell 15.07, or 0.7 percent, to 2,126.05.

Stocks erased a mid-day drop to end slightly higher on Friday, closing out a volatile week punctuated by mixed signals from labor market data and growing anxiety over the fiscal problems in Europe.

"The huge move Friday into the close gave us a more positive tone going into today," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.

Shedding more light on the U.S. economy, U.S. Treasury Secretary Timothy Geithner said Sunday the risk that it will slip back into recession is lower now than at any time in the past year, but he said that recovery will be slow and uneven.

Even so, debt concerns remained in the spotlight. The chief executive of PIMCO, the world's biggest bond fund, voiced concerns about massive U.S. debt levels, saying he preferred to invest in German government bonds rather than Treasuries.

Source: Reuters

« PREVIOUSNEXT »