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Market Recap: EU Does What it Does Best & Brings Markets Down

Market Recap: EU Does What it Does Best & Brings Markets Down

Markets closed down today:

▼ Dow: -0.78 percent

▼ Nasdaq: -1.00 percent

▼ S&P: -0.84 percent

Precious metals:

▼ Gold: down --0.29 percent to $1,637.85 an ounce

▼ Silver: down –2.54 percent to settle at $30.83 an ounce


▼ Oil: -0.91 percent

Markets closed down because:

A collection of worrying news out of Europe sent stocks sharply lower on Monday.

The Dutch government collapsed Monday, a day after French President Nicolas Sarkozy lost the first round of that country's presidential election. A new report showed that European government debt continues to pile up despite severe budget cuts, which have led to unrest and political upheaval across the continent.

Europe's major stock markets plunged. In the U.S., the Dow Jones industrial average lost 102.09 points to close at 12,927.17. The Dow had dropped as many as 183 points in morning trading then spent the rest of the day climbing back.

Figures reported by the European Union's statistics office confirmed the effects of budget-cutting programs on countries that use the euro currency. Even with widespread spending cuts, overall debt rose to 87.2 percent, the highest level since the euro was created. Separately, a survey of the euro zone's manufacturing and services sectors unexpectedly fell in April.

In France, Sarkozy came in second behind Francois Hollande, a harsh critic of the spending cuts prescribed as a way to end the region's debt crisis. Sarkozy and Germany's Chancellor Angela Merkel have been the main architects of Europe's efforts to avoid a collapse of the region's shared currency.

The Dutch government resigned Monday after it couldn't reach agreement with an opposition party to bring its budget deficit within European Union rules. The budget dispute raised the prospect that the Netherlands could lose its top AAA credit rating.

The turmoil roiled Europe's largest markets. Germany's major stock index, the DAX, lost 3.4 percent, its worst day in six weeks. France's CAC-40 index dropped 2.8 percent, wiping away all its gains for the year.

The Standard & Poor's 500 index lost 11.59 points, or 0.8 percent, to 1,366.94.

The Nasdaq composite fell an even 30 points, or 1 percent, to 2,970.45.

Traders shifted money into Treasurys on Monday. The price of the 10-year Treasury note rose, pushing its yield down to 1.94 percent from 1.96 percent late Friday.

Concerns over Europe pushed the price of West Texas crude oil down 77 cents a barrel to settle at $103.11 per barrel in New York.

Europe's slowing economy also hurt Kellogg Co. The food giant slashed its full-year profit forecast, blaming weak sales in the U.S. and Europe. Kellogg's stock dropped 6.1 percent.

After the closing bell, Netflix reported its first quarterly loss in seven years and its stock plunged 13.6 percent in aftermarket trading.

The Associated Press contributed to this report.

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