Wall Street slips as euro concerns linger

Wall Street slips as euro concerns linger


New York: Nov US stocks edged down in a low-volume session on Monday on worries Europe’s credit crisis will spread despite a weekend agreement to bail out Ireland.

But stocks finished well off their lows of the day as the dollar retraced some of its earlier gains and energy and financial stocks rallied late in the session.

While stocks tracked movements in the euro on Monday, a strong US jobs report on Friday could bring the focus back to the economy and break the strong tie betweenUS equities and the euro.

The correlation between the euro and stocks has become more pronounced in recent weeks as the euro zone’s debt problems resurfaced, with traders selling the euro and stocks together.

“Tell me what the euro’s going to do and I’ll tell you where the (stock) market is going to go," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.

Banks and energy stocks outperformed the wider market as crude oil futures rose 2.3% and banks recovered some of their recent losses.

The KBW bank index rose 1%, helped by Bank of America , which climbed 1.5% to $11.31, while Exxon Mobil reversed earlier losses to close up 0.3% at $69.45

Light volume added to volatility, and traders turned their attention to technical markers in the absence of more fundamental news. The S&P 500 bounced off its 50-day moving average, preserving the lower end of its recent trading range.

In the wake of a stronger-than-expected start to the holiday shopping season, investors took profits on a two-week rally in retail stocks. The S&P retail index fell 0.7%.

The Dow Jones industrial average dropped 39.51 points, or 0.36%, to 11,052.49. The Standard & Poor’s 500 Index fell 1.64 points, or 0.14%, to 1,187.76. The Nasdaq Composite Index lost 9.34 points, or 0.37%, to 2,525.22.

European Union finance ministers endorsed an 85 billion euro loan package to help Ireland bridge its deficit, but investors worried how the 16-nation bloc might handle a wider crisis involving Spain and Portugal.

The CBOE Volatility index, known as Wall Street’s fear gauge, rose 3% to hit its highest level since early October, indicating anxiety among investors was increasing.popularly traded E-Mini S&P futures has risen to 0.54, which shows a meaningful relationship between the two assets compared with an insignificant 0.06 correlation two weeks ago.

The problems in Europe overshadowed signs of improving sentiment among consumers heading into the high-spend holiday season.

The number of shoppers in stores over the longUS Thanksgiving holiday weekend rose 8.7% compared with 2009, according to a private survey.

Online retailer Amazon.com Inc rose 1.3% to end at $179.49 after hitting a record high $181.84 on expectations of solid sales on “Cyber Monday," a day of steep discounts for online shoppers.

FedEx Corp added 4.7% to $91.59 after Credit Suisse raised its rating on the package shipping company.