U.S. stocks lose 200 points amidst global uncertainty

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Traders on the floor of the New York Stock Exchange (NYSE) in New York, U.S. May 22, 2018. REUTERS Photo

U.S. stocks opened sharply lower on Tuesday as investors switched cash into perceived safe havens of global financial markets due to a deepening political crisis in Italy and Spain.

Reuters reported that the Dow Jones Industrial Average lost 200 points, as the market began trading.

Initially, the Dow Jones .DJI fell 146.50 points, or 0.59 percent, at the open to 24,606.59.

The S&P 500 opened lower by 16.22 points, or 0.60 percent, at 2,705.11.

The Nasdaq Composite .IXIC dropped 35.34 points, or 0.48 percent, to 7,398.51 at the opening bell.

In Europe, the uncertainties in Spain and Italy, made stocks give up early gains and bond yields recovered from lows as early elections loomed in Italy after the anti-establishment 5-Star and League parties abandoned plans to form a government.

European stocks were a mixed bag, after Asian shares mostly gained on signs the United States and North Korea were still working towards holding a summit.

Early in the European session, the euro, Italy’s government debt and its FTSE MIB stock index all rose in opening trades. But those gains quickly dissipated.

European stocks were trading flat on the day and Italian bond yields were up 3 basis points on concern new elections would turn into a debate on euro membership.

“We doubt this rally in markets has legs as what this means is that the next election in Italy becomes a referendum vote on euro membership,” said Frederik Ducrozet, senior European economist at Pictet Wealth Management.


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