Forexpros – U.S. stocks opened sharply lower on Wednesday, as concerns over the handling of the debt crisis in the euro zone intensified amid soaring borrowing costs in Spain and Italy while investors eyed the release of U.S. economic data.
During early U.S. trade, the Dow Jones Industrial Average plunged 1.08%, the S&P 500 index tumbled 1.15%, while the Nasdaq Composite index plummeted 1.32%.
Sentiment weakened broadly earlier after Italy’s Treasury auctioned EUR5.73 billion of 5-and10-year bonds in an auction which met with lackluster investor demand, while borrowing costs rose sharply, indicating that concerns over Spain and uncertainty over the outcome of elections in Greece next month are having a negative impact on Italy.
The yield on Spanish 10-year bonds climbed to 6.7% earlier Wednesday, nearing the critical 7% threshold that preceded bailouts in Greece, Ireland and Portugal.
Meanwhile, Greece concerns also reemerged after an opinion poll showed that anti-bailout party Syriza took the lead in the June 17 election race.
Apple shares were down 0.77% after Chief Executive Tim Cook said technology for televisions was of “intense interest” but stressed the company’s efforts would unfold gradually amid speculation the iPad and iPhone maker was on the brink of unveiling a revolutionary iTV.
The announcement came a day after Samsung Electronics launched its Galaxy S smartphone in Europe, in a move to topple Apple Inc. as the world’s leading smartphone maker.
Meanwhile, Research In Motion Ltd saw shares dive 10.8% after saying it hired bankers for a fresh strategic review and to look for partnerships, as the BlackBerry-maker warned it would likely report a fiscal first-quarter operating loss. Shares plunged 5.61% in pre-market trade.
Facebook was also in focus, as shares rallied 2.05% after U.S. antitrust regulators said they intend to give the company’s proposed purchase of the popular photo-sharing app maker Instagram a lengthy investigation.
Elsewhere, energy stocks were broadly lower as shares in Chevron plummeted 2.16% and Exxon Mobil retreated 0.94%, while Chesapeake plunged 2.45%.
Bloomberg reported earlier in the day that Chesapeake Energy’s depressed valuation made the company a potential target for acquirers willing to bet that natural gas prices will rebound from a decade low.
Also in M&A news, Stanley Black & Decker was said to be among potential bidders for private equity-owned Infastech, a Singapore-based industrial fastener maker with revenues of more than USD500 million. Shares in Stanley Black & Decker were down 2.55% after the news.
Across the Atlantic, European stock markets were sharply lower. The EURO STOXX 50 plunged 1.57%, France’s CAC 40 tumbled 1.73%, Germany’s DAX dropped 1.46%, while Britain’s FTSE 100 plummeted 1.73%.
During the Asian trading session, Hong Kong’s Hang Seng Index tumbled 1.7%, while Japan’s Nikkei 225 Index dipped 0.4%.
Later in the day, the U.S. was to release industry data on pending home sales.
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