Debt-limit fight, eurozone fears weigh on US stocks

NEW YORK: US stocks fell as markets opened Monday amid uncertainty over the debt-ceiling impasse in Washington and the eurozone's battle to extinguish a blazing debt crisis.

The Dow Jones Industrial Average slumped 100.28 points (0.80 percent) to 12,379.45 in the first half-hour of trading.

The broader S&P 500 dropped 9.08 points (0.69 percent) to 1,307.06, while the tech-heavy Nasdaq Composite shed 19.36 points (0.69 percent) to stand at 2,770.44.

In Washington, a bipartisan group of US senators was hurrying to cobble together a deal to raise the government's debt ceiling and prevent a potentially disastrous default by August 2.

Meanwhile, eurozone leaders were preparing to gather at an emergency summit in Brussels later this week on preventing a default by Greece that could have damaging ripple effects on Europe's larger economies.

Ahead of the opening bell on Wall Street, global stock markets slumped and gold soared to a record high of above $1,600 per troy ounce in London as spooked investors sought safe-haven assets.

The ominous headlines have threatened to overshadow the release of numerous US companies' second-quarter earnings this week, which many analysts believe could give a boost to the stock market.

Shares of oil-services giant Halliburton rose 0.2 percent after it reported that profits jumped 54 percent in the second quarter over the same period last year, despite setbacks in Libya, Iraq and sub-Saharan Africa.

Tech giant IBM was set to report earnings late Monday, while Apple, Yahoo! and three major US banks -- Bank of America, Wells Fargo and Goldman Sachs -- will report their results on Tuesday.

"The question now is, can better-than-expected earnings supplant macro concerns as the main market driver?" said Patrick O'Hare, an analyst with Briefing.com.

"Probably not, but what they will do is lay a foundation for a robust relief rally in the event a palatable deal on the debt limit can be reached and EU leaders can pacify participants with a plan that stems debt contagion concerns in the eurozone."

Shares of News Corp. were down 2.9 percent as the beleaguered media empire faced a deepening crisis over its phone-hacking scandal in Britain, with a prominent former executive, Rebekah Brooks, arrested over the weekend.

Bond prices made slight gains. The yield on the 10-year Treasury fell to 2.89 percent from 2.91 percent late Friday, while that on the 30-year bond hovered at around 4.25 percent.

Bond prices and yields move in opposite directions.

Copyright AFP (Agence France-Presse), 2011