Stocks Start Lower as Spanish Yields Up
U.S. stocks opened lower on Monday with investors losing any cheer from Greek-election results to concern about rising government bond yields in Spain. The Dow Jones industrial average lately was down 55.10 points, or 0.43 percent, at 12,712.07. The Standard & Poor’s 500 Index was down 3.66 points, or 0.27 percent, at 1,339.18. The Nasdaq Composite Index was down 0.17 point, or 0.01 percent, at 2,872.63.
Victory by a party supporting Greece’s bailout deal opens the way for negotiations with its international creditors on giving it more time and room to fix its broken finances. And European officials are signaling a willingness to talk and avoid a disastrous aid cutoff that could force Greece out of the euro.
However Spain’s borrowing costs are climbing ever higher and Europe’s governments are struggling to agree on putting new foundations under the euro and drag it out of a crisis over too much government debt. The yield, which topped 7% earlier, was last up 31 basis points to 7.18%, pressuring the yield on Italy’s 10-year bond, up 17 basis points to 6.1%.
The executive board of the International Monetary Fund finalized the details of its $430 billion crisis capital fund, and said it would only draw on the new resources if its existing funds were low, the agency announced late Friday.
A “major” announcement from Microsoft is set to begin the week, and the company is being unusually coy about the matter.One of the reports that have come out says Microsoft is more than borrowing from Apple (NASDAQ:AAPL) in marketing, but actually unveiling its own branded tablet for the Windows Mobile operating system. It also could be something that has the characteristics of the Xbox.
AK Steel (NYSE:AKS) said Monday it expects to generate a second-quarter profit of cents to 6 cents a share. In the first quarter, AK Steel reported a loss of 11 cents a share.
Oil futures dropped as rising Spanish bond yields revived worries over Europe’s debt crisis, despite a victory of the pro- bailout party in Greece’s elections. Light, sweet crude for July delivery fell $1.69, or 2%, to $82.34 a barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe fell $1.94, or 2%, to $95.67 a barrel.