NEW YORK—U.S. stock markets fell Monday, the first day of the third quarter, as investors were once again spooked by news coming out of the European Union on sovereign debt concerns.
The Dow Jones Industrial Average fell 258 points, or 2.4 percent. The S&P 500 Index dropped 32 points, or 2.9 percent, falling to their 2011 lows, while the Nasdaq Composite Index dropped 79 points, or 3.3 percent.
While the Dow seesawed much of the morning, markets were routed in Europe as benchmark indices in France, Spain, and Germany all fell after the Greek government said that it will not be able to cut its deficit enough to meet targets established as a part of its bailout deal with the eurozone.
On Monday, U.S. economic data such as construction spending and manufacturing activity met or exceeded analysts’ expectations, however, they were dwarfed by negative news coming out of Europe.
Greece said Monday that its government passed more austerity measures—up to 6.6 billion euros (US$8.7 billion)—to slash its budget deficit to around 6.8 percent of its country GDP. However, it did not meet the 6.5 percent goal it previously agreed to with EU officials on its first bailout. A second bailout, which was agreed to in July, still is subject to further details being workout among the parties involved.
The news sent the euro currency tumbling, as it fell 1.5 percent against the dollar. The currency move was an added pressure on U.S. companies relying on exports, as it would make American goods more expensive to Europeans.
