Wall Street Pulls Back After Rally.
Wall Street opened lower on Wednesday after a robust rally a day earlier, as soft demand at an Italian debt auction sparked concerns over the financial health of the euro zone.
The Standard & Poor’s 500-stock index lost 0.6 percent at the start of trading, the Dow Jones industrial average fell 0.5 percent and the Nasdaq composite index slid 0.7 percent. European markets were down more than 1 percent in afternoon trading and the euro currency fell to a four-month low against the dollar.
On Tuesday, the Dow climbed more than 100 points Tuesday to another record close, and the S.&P. 500 rose to within striking distance of its closing high, on optimism about the economy.
“I suspect that we are seeing institutions reposition their positions, and the new worries from Europe are causing a bit of technical hiccup in the market today after a solid day yesterday,” said Peter Cardillo of Rockwell Global Capital in New York.
Italy paid more to borrow over five years than it has since October at an auction Wednesday, as lack of progress in forming a new government and worries about Cyprus’s bailout hurt demand. The treasury sold $5 billion of the new June 2018 bond at a yield of 3.65 percent, two days after an election in which no party won enough seats to govern.
Cyprus is finalizing capital control measures to prevent a run on its banks by depositors anxious about their savings, after wealthy depositors were penalized under a rescue package agreed with international lenders. Cypriot banks were due to reopen on Thursday.
Source : The Wall Street Journal.