Forexpros – U.S. shares closed lower Tuesday in the wake of Greek and French elections resulting in political uncertainty and deepening euro zone debt fears.
Near the open of U.S. trade, the Dow Jones Industrial Average gave back 0.59%, the S&P 500 fell 0.43%, while the Nasdaq Composite dropped 0.39%.
Fuelling the risk off trade, Greek political leaders were continuing to hold cross party talks aimed at forming a government, amid fears that the country will not have a government in place in time to secure its next tranche of international aid next month, as new elections look increasingly likely.
An initial attempt at forming a coalition government by the country’s largest party, New Democracy, collapsed on Monday sending waves of debt fears into the stock market.
Meanwhile in France, investors remained nervous due to concerns over new president-elect, Socialist Francois Hollande renegotiating the euro zone’s fiscal pact in order to stimulate growth in the region.
Equity sentiment found some support after official data showed that German industrial production jumped 2.8% in March, easily surpassing expectations for a 0.8% increase, after declining in each of the previous three months.
The German economy ministry also said the “the outlook for industry has improved significantly”.
In equities news, Facebook has launched its pre IPO road show to raise as much as USD11.8 billion, the most ever for an internet company.
Arena Pharmaceuticals soared 23% as cancer risks associated with its weight loss drug were found to be in line with estimates.
In bearish news, Fossil plunged 37%, as the watch maker lowered its 2012 earnings forecast.
At the close of European trade, the EURO STOXX 50 closed down 2.06%, France’s CAC 40 fell 2.78% and Germany’s DAX dropped 1.90%. Meanwhile, in the U.K. the FTSE 100 traded lower by 1.78.
Investors are anticipating a U.S. 10 year note auction and Australian employment numbers Wednesday.
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