The Washington Post

Trounced again by Europe’s troubles

U.S. stocks fell, sending the Standard & Poor’s 500-stock index to its worst weekly loss in two months, as Spanish, French and Italian bond yields rose and Fitch Ratings said Europe’s debt crisis poses a threat to American banks.

Alcoa, Chevron and J.P. Morgan Chase lost at least 8 percent to lead declines in the Dow Jones industrial average last week. Sears Holdings fell 14 percent and Abercrombie & Fitch dropped 17 percent after the retailers’ quarterly results trailed forecasts.

The S&P 500 decreased 3.8 percent, the most since the week ended Sept. 23, to 1,215.65. The index closed at the lowest level since Oct. 20. The Dow fell 357.52 points, or 2.9 percent, to 11,796.16.

“In the euro zone you’ve got this horrible crisis, and it’s not clear to anyone how it is going to be solved,” said George Feiger, chief executive officer of Contango Capital Advisors, the San Francisco-based wealth management arm of Zions Bancorporation, which oversees about $3.3 billion.

Equities slumped last week as higher government bond yields in Spain, France and Italy spurred concern the European debt crisis is intensifying outside Greece. The S&P Financials Index lost 5.6 percent, the biggest drop among 10 industries, after the Fitch report spurred speculation the European crisis poses a threat to earnings.

The Treasury will sell $29 billion in three-month bills and $27 billion in six-month bills on Monday. The yielded 0.01 percent and 0.046 percent in when-issued trading. The U.S. will also sell $35 billion in two-year notes, $35 billion in five-year notes and $29 billion in seven-year notes. They yielded 0.29 percent, 0.95 percent and 1.495 percent.

— Bloomberg News


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