Stocks Sink on Debt Fears

U.S. stocks closed with broad losses Monday,led by banks on concerns the United States and Europe were not coming to grips with the extent of their debt problems. The Dow Jones Industrial Average lost 94.57 points, or 0.76%, to 12,385.16. The S&P 500 slipped 10.70 points, or 0.81%, to 1,305.44. The Nasdaq Composite lost 24.69 points, or 0.89%, to 2,765.11.

Worries that Europe’s debt crisis will spread to Italy and Spain spooked investors Monday after stress tests into the continent’s banks failed to ease tensions ahead of an emergency meeting of EU leaders.

Interest rates on short-term Treasury securities dropped in Monday’s auction, with rates on six-month bills falling to a record low. The Treasury Department auctioned $27 billion in three-month bills at a discount rate of 0.020 percent, down from 0.030 percent last week.

Oil loses about 2 percent Monday on stronger dollar. Benchmark West Texas Intermediate crude for August delivery gave up $1.31 to settle at $95.93 per barrel on the New York Mercantile Exchange.

IBM has raised its full-year profit guidance and says its quarterly earnings rose 8 percent on increases in each of its three major product categories. Net income was $3.66 billion, or $3 per share, compared with $3.39 billion, or $2.61 per share, a year ago. Revenue increased 12 percent to $26.7 billion, ahead of the $25.4 billion analyst estimate.

Cisco Systems Inc.said Monday it plans to cut about 6,500 jobs as part of efforts to lower costs. The maker of networking gear said the number includes 2,100 employees who opted to take part in a voluntary early-retirement program. The plan also includes a 15% reduction of employees at the level of vice president and above.

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