US STOCKS-Europe, Wal-Mart knock Wall St lower

Mon Apr 23, 2012 4:26pm EDT

Related Topics

* Wal-Mart shares off after bribery report

* European factories post worst month in nearly 4 years

* Indexes down: Dow 0.8 pct, S&P 500 0.8 pct, Nasdaq 1 pct

By Caroline Valetkevitch

NEW YORK, April 23 (Reuters) - U.S. 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.

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 , which fell 2.9 percent to $16.98. The KBW bank index 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,"sai d Hank Smith, chief investment officer at Haverford Trust Co. in Philadelphia.

Wal-Mart Stores Inc 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 . 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 was among the worst performing areas, down 1.4 percent.

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

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 fell 1.1 percent $37.16.

Shares of Apple Inc, 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 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.

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