April 23, 2012 / 8:48 AM / 7 years ago

Europe, Wal-Mart knock Wall Street lower

NEW YORK (Reuters) - Stocks fell on Monday as political turmoil in Europe cast doubts on the euro zone’s ability to push through measures to end its debt crisis and as Wal-Mart sank following a report it stymied a bribery probe.

Traders work on the floor of the New York Stock Exchange April 23, 2012. REUTERS/Brendan McDermid

The Dutch prime minister tendered his government’s resignation on Monday after Dutch officials failed to agree on budget cuts. Adding to the uncertainty was a Sunday vote in France that threw the presidential race wide open.

The renewed worries came as the euro zone’s business slump deepened at a far faster pace than expected in April. The Markit PMI fell to a five-month low, confounding forecasts for a rise.

Europe’s debt crisis has been a major headwind for U.S. equities as investors worried it could hurt corporate profits. Bank shares were hit by the concern, including Morgan Stanley (MS.N), which fell 2.9 percent to $16.98. The KBW bank index .BKX fell 0.6 percent.

“It’s becoming clear the euro zone is in a recession, and that brings a lot of concerns. To really get out of the debt problem, you need growth, and we haven’t gotten to that step yet,” said Hank Smith, chief investment officer at Haverford Trust Co. in Philadelphia.

Wal-Mart Stores Inc (WMT.N) slumped 4.7 percent to $59.54 and was the biggest drag on the Dow after the New York Times reported Wal-Mart officials stymied an internal investigation into bribery allegations at its Mexican unit, Walmart de Mexico WALMEXV.MX. Those shares dropped 12 percent to 37.82 pesos.

The sell-off was broad with almost 3 stocks on the New York Stock Exchange falling for each one that rose, and the economically sensitive S&P materials sector .GSPM was among the worst performing areas, down 1.4 percent.

The Dow Jones industrial average .DJI was down 102.09 points, or 0.78 percent, at 12,927.17. The Standard & Poor’s 500 Index .SPX was down 11.59 points, or 0.84 percent, at 1,366.94. The Nasdaq Composite Index .IXIC was down 30.00 points, or 1.00 percent, at 2,970.45.

After the bell, shares of Netflix Inc (NFLX.O) tumbled 14.3 percent to $87.30 as it posted a first-quarter loss. Shares of Texas Instruments Inc(TXN.O), however, were up 3.8 percent at $33.10 in after-hours trading following its results.

The S&P 500 is still up 8.7 percent for the year, some way off its year-to-date gain of 12.8 percent reached earlier this month.

Materials shares followed a fall in commodity prices as copper prices dropped 1.6 percent. Shares in Freeport McMoran Copper & Gold Inc (FCX.N) fell 1.1 percent $37.16.

Shares of Apple Inc (AAPL.O), which is due to report results Tuesday after the bell, briefly fell below their 50-day moving average for the first time in four months. Shares closed down 0.2 percent at $571.70.

Kellogg Co (K.N) shares dropped 6.1 percent to $50.70 after the cereal maker cut its full-year profit view.

The majority of S&P 500 results for the first quarter have been positive so far, however, with 79 percent of companies beating Wall Street’s earnings expectations.

About 6.56 billion shares changed hands on the NYSE, the Nasdaq and NYSE Amex, just shy of the 6.77 billion daily average so far this year.

Editing by Padraic Cassidy

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