DOW - More fear strikes back!

Dow 10,066.57 -126.82 -1.24%

US stocks tumble in late sell-off on European crisis fears

NEW YORK: US stocks slumped on Monday on new fears over Europe's debt crisis, triggered by the rescue of a Spanish savings bank.

The Dow Jones Industrial Average lost 126.82 points (1.24 percent) to end at 10,066.57, extending last week's massive losses when the blue-chip index shrank more than four percent and briefly fell below the sensitive 10,000-point level.

The bailout "exacerbated fears of continental debt contagion, and provided more than enough ammunition for the bears to claim the session," said analyst Andrea Kramer of Schaeffer's Investment Research.


It also triggered "another round of concerns regarding the health of the financial system in that country in spite of the existence of the huge EU/IMF rescue plan," said Frederic Dickson, chief market strategist at D.A. Davidson & Co.

"Investors will continue to follow the ongoing financial soap opera in Europe and the movement of the euro in response to changing investor expectations regarding how the sovereign debt situation plays out in Greece, Portugal, and Spain," he said.

Wall Street received a temporary boost Monday when industry data showed a jump in US existing-home sales. It cut losses by midday but a late sell-off on the European concerns pulled stocks down.

"A solid increase in existing-home sales helped repair some of the damage in late-morning trading, but sentiment seems to still be cautious amid the backdrop of the euro-area debt crisis, exacerbated by the weekend's government bailout of a Spanish regional bank," analysts at Charles Schwab & Co said.