World Business

Wall Street selloff continues on fresh European concerns

(Xinhua)
Updated: 2010-05-25 13:51

NEW YORK: Wall Street ended broadly lower, with both the Dow and S&P down more than 1 percent, as a late plunge of financial sector accelerated selloff across the board.

As market closed, the Dow Jones industrial average fell 126.82, or 1.24 percent, to 10,066.57. The Standard & Poor's 500 index dropped 14.04, or 1.29 percent, to 1,073.65 and the Nasdaq was down 15.49, or 0.69 percent, to 2,213.55.

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The market opened lower on Monday as the euro pulled back from a short-covering rally after Spain's weekend move to rescue a troubled saving bank.

The Bank of Spain said on Saturday it had taken over the running of CajaSur following the failure of its planned merger with another regional lender, underlining the weakness of the banking sectors of some euro zone members.

The euro retreated 1.84 percent to 1.2353 dollars on Monday, giving back most of last week's gains, exerting downward pressures on the stock market since US stocks have been tracing the movement of the 16-nation currency for weeks. A sliding euro indicates waning confidence on Europe's ability to contain the debt crisis in some countries, which unsettled stock investors.

Major indexes soon rebounded from early lows after report showed existing home sales soared in April as home buyers scrambled to claim the tax credit that expired at the end of the month.

According to the National Association of Realtors, the existing home sales jumped 7.6 percent last month to a seasonally adjusted annual rate of 5.77 million units, higher than analysts had expected.

However, the boost didn't last long as financials and energy stocks weighed on the market.

Financial big names, including Bank of America, J.P. Morgan Chase and American Express dropped sharply, dragging the Dow quickly lower in the last few minutes of trading.

Energy shares were also among worst performers, led by BP, whose share fell to a 52-week low in the session as the company is facing mounting criticism for the handling of its Gulf of Mexico oil spill.