NEW YORK (Reuters) - U.S. stocks fell more than 1 percent on Monday as political turmoil in Europe cast doubts on the bloc’s ability to push through measures to end its debt crisis and as Wal-Mart sank following a report it stymied a bribery probe.
The Dutch prime minister tendered his government’s resignation on Monday after Dutch officials failed to agree on budget cuts. Adding to the uncertainty was a Sunday vote in France that threw the presidential race wide open.
The renewed worries came as the euro zone’s business slump deepened at a far faster pace than expected in April.
Europe’s debt crisis has been a major headwind for U.S. equities as investors worried it may hurt corporate profits. Bank shares were hit by the concern, including Morgan Stanley (MS.N), which fell 3.1 percent to $16.93.
Wal-Mart Stores Inc (WMT.N) slumped 4.9 percent to $59.41 and was the biggest drag on the Dow after the New York Times reported Wal-Mart officials stymied an internal investigation into bribery allegations at its Mexican unit, Walmart de Mexico WALMEXV.MX. Those shares were last down 11.6 percent to 38.05 pesos in Mexico.
The sell-off was broad with about six stocks on the New York Stock Exchange falling for each one that rose, and the economically sensitive S&P materials sector .GSPM was the among the worst performing areas, down 1.9 percent.
“We’re in a period now where the market seems to be consolidating gains from the first and fourth quarter, and we’re going back and forth,” said Hank Smith, chief investment officer at Haverford Trust Co. in Philadelphia.
“It’s becoming clear the euro zone is in a recession, and that brings a lot of concerns. To really get out of the debt problem, you need growth, and we haven’t gotten to that step yet,” he said.
The Dow Jones industrial average .DJI was down 134.86 points, or 1.04 percent, at 12,894.40. The Standard & Poor’s 500 Index .SPX was down 13.92 points, or 1.01 percent, at 1,364.61. The Nasdaq Composite Index .IXIC was down 34.45 points, or 1.15 percent, at 2,966.00.
Materials shares followed a fall in commodity prices as copper dropped 2 percent. Shares in Freeport McMoran Copper & Gold Inc (FCX.N) fell 1.5 percent $37.
Apple Inc (AAPL.O), which is due to report results Tuesday after the bell, fell below its 50-day moving average for the first time in four months, drawing buyers and a quick reversal in early trade as the shares briefly turned positive. Shares were last up 0.03 percent at $573.20.
Kellogg Co (K.N) fell 5.1 percent to $51.24 after the cereal maker cut its full-year profit view.
The majority of S&P 500 results for the first quarter has been positive so far, however, with 79 percent of companies beating expectations.
Additional reporting by Edward Krudy; Editing by Padraic Cassidy