Stocks slip as protests in Europe worsen debt fears

Associated PressSeptember 30, 2010 

— Stocks slipped Wednesday as protests against austerity measures in Europe brought new worries about the region's financial system.

The dollar fell further against other currencies as traders anticipate more action by the Federal Reserve to push U.S. interest rates down. The euro rose to as high as $1.3647Wednesday, its strongest point since mid-April.

Gold continued to climb past $1,300.

European markets fell as demonstrators gathered in Brussels, where the European Union is based, and in several of the bloc's member countries to protest austerity measures aimed at preventing another crisis like the one that required a bailout of Greece this year. The protests raised concerns that countries such as Spain will not be able to implement policies required to heal their bloated public finances.

Kate Warne, investment strategist at Edward Jones in St. Louis, said the protests in Europe suggest that those countries will have trouble implementing austerity measures and, as a result, markets there are spooked.

"Governments will have more difficulty making cuts to get their budgets in order," she said.

U.S. stocks swooned this spring as a fiscal crisis in Greece appeared to be spreading to other weak European economies, including Portugal and Spain. A relative calm in European markets since then has allowed U.S. stocks to rise sharply.

Most sectors fell on the stock market except energy, which rose after crude oil prices gained. Schlumberger, Occidental Petroleum and other companies rose after the price of crude oil jumped on news that inventories fell last week.

Benchmark crude for November delivery rose $1.68 to settle at $77.86 a barrel on the New York Mercantile Exchange.

The decline Wednesday in U.S. stocks marked another pause in a monthlong rally that has made September one of the strongest for U.S. stocks in history. With only one trading day left this month, the Dow Jones industrial average is on track for its best September since 1939 with a gain of 8.2percent so far. Still, it's up only 3.9 percent for the year.

The Dow Jones industrial average lost 22.86, or 0.2 percent, to close at 10,835.28

The Standard & Poor's 500 index slipped 2.97, or 0.3 percent, to 1,144.73, and the Nasdaq composite fell 3.03, or 0.1 percent, to 2,376.56.

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