Wall St drops on Italy political turmoil

By @ibtimes on

Stocks fell on Monday as investors stayed focused on Europe, this time on the political turmoil in debt-burdened Italy, as a reason to sell risky assets.

Italian Prime Minister Silvio Berlusconi defied pressure to resign as he struggled to hold a crumbling center-right coalition, with markets on edge before a key parliamentary vote on budget reforms.

Adding to the uncertainty, Greece's outgoing Socialist prime minister and conservative opposition leader raced to forge a coalition government and implement a new bailout program.

Today's market is solely driven by whether Italy's Berlusconi will resign or not, said Peter Boockvar, equity strategist at Miller Tabak + Co in New York. We will thus have another week of markets being driven by politicians.

The Dow Jones industrial average was down 86.09 points, or 0.72 percent, at 11,897.15. The Standard & Poor's 500 Index was down 10.04 points, or 0.80 percent, at 1,243.19. The Nasdaq Composite Index was down 30.78 points, or 1.15 percent, at 2,655.37.

Equities have been very sensitive to headlines from Europe, especially with a light U.S. economic calendar this week and as earnings season winding down.

Financials and industrial stocks were the biggest decliners, with the S&P financial sector off 1.1 percent and the capital goods group off 1.5 percent. Bank of America Corp lost 2.6 percent to $6.32, near its 52-week low.

Warren Buffett's conglomerate, Berkshire Hathaway Inc, reported a smaller third-quarter profit late Friday after losing more than $2 billion on derivatives related to stock market performance. The Class B shares fell 1.4 percent to $76.13.

Consumer electronics chain Best Buy Co Inc lost 3.3 percent to $26.40 after the consumer electronics chain said it was buying British partner Carphone Warehouse Group Plc for $1.3 billion and scrapping plans for a chain of European megastores.

About 3.15 billion shares traded so far on the New York Stock Exchange, the American Stock Exchange and Nasdaq, slightly below average.

On the NYSE, decliners beat advancers by a ratio of 2-to-1, while on the Nasdaq, the ratio stood at 3-to-1.

(Reporting by Angela Moon; editing by Jeffrey Benkoe)

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