Despite the good economic news investors enjoyed late last week, U.S. markets fell today, the first trading day after the Labor Day holiday weekend. The Dow Jones Industrial Average fell 106.86 points to 10,341.07 and the Nasdaq lost 24.86 points to close at 2,208.89. The S&P 500 closed at 1,091.85 losing 12.66 points.
Much of the U.S. losses can be attributed to European economic news. While U.S. markets were closed Monday for Labor Day, Asian and European markets were open and all closed up on hopes that the U.S. economy was continuing to rebound. This enthusiasm had all but worn off by Tuesday thanks to news from the Wall Street Journal that the recently conducted European bank stress tests had not been completely accurate and had understated the amount of government bond holdings each of the banks had. Since many countries, such as Spain, are struggling economically, this means that European banks’ exposure to default risks is greater than we had been led to believe. European markets were down while Asian markets were mixed.
Stocks in the news: Oracle Corp (NASDAQ: ORCL), Hewlett-Packard Co (NYSE: HPQ), Barclays PLC (NYSE: BCS).
