Nov. 8, 2011 at 1:08 PM ET
By msnbc.com news services
Stocks retreated from earlier gains Tuesday after an Italian parliament vote put whether the country can manage its debt crisis in doubt.
Approaching 1 p.m. Eastern, the Dow Jones Industrial Average was off 0.29 percent. The S&P 500 was 0.10 lower. The Nasdaq had dropped 0.04.
Stocks had been up immediately after the opening bell, but began falling an hour into the trading day.
Investors got a bit of good news about the U.S. economy as the Labor Department reported that employers are advertising more jobs than at any point in the last three years.
The Associated Press reported on the Italian situation:
Yields on Italian government bonds have spiked this week, a sign that markets are questioning the country's ability to pay its debt. Unlike Greece, Portugal or Ireland — all of which received financial lifelines — Italy has too much debt to be rescued by its European neighbors.
Italian Premier Silvio Berlusconi won a confidence vote Tuesday, but the result left him without a majority in parliament. Berlusconi's main coalition ally had urged him to step aside ahead of the vote. Many investors believe a new government would enact more austerity measures that could help Italy cut its debt load and remain part of the euro.
Europe's debt crisis has dictated much of the trading in financial markets since the beginning of October. Investors fear that a default by Greece or another nation that shares the euro currency could lead to a widespread financial crisis similar to the one in 2008 after the fall of Lehman Brothers.
"Europe is the last big question hanging over the market, and drowned out a decent earnings season," said Rick Fier, vice president of equity trading at Confier Securities. "The market has been so whipsawed lately that it's really just staying in place until we know some more outcomes."
Keith Mccullough of Hedgeye Risk Management discusses the effect Italy is having on the markets with CNBC.