Stocks Dive at Open on Debt Worries

Stocks started sharply lower on Monday, ahead of an expected announcement from the congressional supercommittee that it had failed to reach a deficit-reduction agreement, as growing concerns about heavy debt loads both domestically and abroad added more uncertainty to a troubled market. The Dow Jones Industrial Average lately fell 221.08 points to 11,575.08. The S&P 500 Index fell 24.41 points to 1,191.24. The Nasdaq Composite Index declined 53.93 points to 2,518.57.

The U.S. congressional committee assigned to draft a plan for cutting $1.2 trillion from the nation’s deficit over 10 years is expected to announce Monday that it has failed, according to media reports Sunday.

A rise in interest rates on French government debt and weaker growth prospects could be negative for the outlook on France’s credit rating, Moody’s warned in a report on Monday, adding to pressure on European debt markets. Worries that France has the weakest economic fundamentals among the euro’s six AAA-rated countries have drawn the euro zone’s second largest economy into the firing line in the debt crisis this month.

Oil prices fell to near $97 a barrel Monday in Asia after a Chinese leader predicted the world’s current economic malaise will be long lasting. Benchmark crude for January delivery was down 68 cents at $96.99 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange.

U.S. property and casualty insurer Alleghany Corp (NYSE:Y) said it would buy reinsurer Transatlantic Holdings (NYSE:TRH) for $3.4 billion in cash and stock, possibly putting an end to the months-long buyout battle for the reinsurer. The Alleghany offer values the reinsurer at nearly $5 more per share than Validus Holdings Ltd’s (NYSE:VR) latest offer, which may help Transatlantic ward off Validus’ hostile takeover pitch.






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