Nov. 14, 2011 at 4:02 PM ET
By msnbc.com news services
Stocks fell right after the opening bell and lower Monday, as costs for Italy’s and Spain’s governments to borrow rose, signaling that the eurozone still has much work to do to handle its debt issues.
According to preliminary calculations, the Dow Jones Industrial Average was off 74.62, or 0.61 percent, to 12,079.06. The S&P 500 fell 11.94, or 0.94 percent, to 1,251.91. The Nasdaq ended down 21.53, or 0.80, to 2,657.22.
Italy managed to sell five-year bonds to investors and raise $4.1 billion on Monday. But the 6.29 percent interest rate was the highest since 1997. Spain’s rate moved above 6 percent.
Worrying signs about Europe reemerged Monday. Italy's largest bank, Unicredit, reported a $14.4 billion quarterly loss. Also, the Italian government raised $4.1 billion in a sale of five-year bonds, but the 6.29 percent interest rate was the highest since 1997. Italy paid a much lower rate of 5.32 percent at a similar auction last month. The increase is a sign that investors are still worried about Italy's ability to service its debt and cut back its bloated budget.
"The problems these countries are dealing with go well beyond their prime ministers," said Dan Greenhaus, chief global strategist at the brokerage BTIG. "Italy didn't get where it is in five minutes. And it's not going to get out of where it is in five minutes. This is going to take months."
The New York Times noted some cause for optimism though.
Jeffrey D. Saut, chief investment strategist at Raymond James in St. Petersburg, Fla., noted that for the 445 of the S.& P. 500 companies that had reported results through Thursday, profits were up 22 percent from a year earlier, while revenues were up almost 12 percent.
Selling on Wall Street is unlikely to go very far “because earnings are just too good,” he said. Assuming the United States does not dip into recession, “I think you’ll see people outside of the United States shoveling money into stocks in this country.”
Retailers are reporting quarterly earnings. Lowe's Cos. posted profits that were below Wall Street's estimates, pulled down by charges tied to store closings and unfinished projects. The home-improvement retailer's stock dropped on the news.
J.C. Penney Co.'s stock also fell after it reported a quarterly loss early Monday. The department store operator said its results were weighed down by restructuring costs and it lowered its earnings outlook for the rest of the year.
IBM was up nearly 1 percent after the investor Warren Buffett said his firm has been buying the company's stock this year. The purchases have given Berkshire Hathaway Inc. a stake of more than 5 percent in IBM. Berkshire will file a full quarterly update on its holdings Monday afternoon.
No major economic reports came out Monday.
Steven Wieting, Citigroup economist, discusses the remaining risks Europe has for the U.S. economy and markets with CNBC.
Previously: Stocks continue lower in midday trading
The Associated Press contributed to this report.