Bottom Line - U.S. stocks fall as worries about Europe resurface
U.S. stocks fell sharply Monday as worries resurfaced about the European debt crisis. Bank stocks fell amid concerns about the broker MF Global, which filed for bankruptcy protection Monday.
The Dow Jones industrial average was lately down over 130 points. The decline comes after the Dow closed out its fifth week of gains last week, its longest winning streak since January.
Bank stocks dropped sharply in premarket trading after the New York Federal Reserve said it suspended MF Global Holdings from conducting new business as a Treasury bond dealer.
Trading in MF Global stock was halted. In premarket trading, Bank of America Corp. was down 2.3 percent. Citigroup Inc. and JPMorgan Chase & Co. dropped by more than 1.3 percent.
Shares of MF Global fell sharply after large investments in government bonds from European countries backfired. Moody’s Investors Service and Fitch Ratings have slashed the firm’s credit rating to junk grade.
The Organization for Economic Cooperation and Development warned Monday that European economies will see a “marked slowdown” next year. The organization called on the European Union to provide more information on how it plans to stem the debt crisis.