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U.S. stocks declined, snapping a two-day advance in the Standard & Poor’s 500 Index, as an increase in Italian borrowing costs deepened concern Europe will struggle to contain its sovereign debt crisis.
Stocks rose last week, restoring the year-to-date gain for the S&P 500, as improving economic data and leadership changes in Greece and Italy bolstered investor optimism. Equities tumbled on Nov. 9 as yields on Italian government bonds surged, fueling concern European leaders will struggle to fund bailouts.
Italy sold 3 billion euros ($4 billion) of five-year bonds, the maximum target, at the highest yield in more than 14 years as Mario Monti seeks to form a new government to restore investor confidence in public finances. Spanish 10-year bonds slid, pushing the yield on the securities to more than 6 percent for the first time since Aug. 5. German Chancellor Angela Merkel called for an overhaul of the European Union, advocating closer political ties and tighter budget rules.
Dow 12,075.88 -77.80 -0.64%, Nasdaq 2,659.17 -19.58 -0.73%, S&P 500 1,251.91 -11.94 -0.94%
Morgan Stanley and Citigroup Inc. fell at least 2.6 percent as European lenders sank. Bank of America Corp. (BAC) slid 2 percent after selling most of its China Construction Bank Corp. stake to boost capital. The second-biggest U.S. lender by assets sold about 10.4 billion shares in China Construction Bank through private transactions with a group of investors. The sales are expected to generate an after-tax gain of about $1.8 billion, the lender said today. After the closing, the company will own about 1 percent of the common shares of CCB, Bank of America said.
J.C. Penney Co. slid 1.3 percent to $33.47. The department- store chain led by the former head of Apple Inc.’s retail operations reported a third-quarter loss because of costs from an early retirement plan.
Boeing Co. (BA) added 2.6 percent after winning its biggest-ever civil jet order. The company signed an agreement with Emirates at the Dubai Air show for 50 of its 777-300ER jets and an option for 20 more, in a deal valued at $26 billion. The accord extends their relationship in the wide- body market, with Emirates operating more than 90 of the 777s for the industry’s biggest such fleet.
International Business Machines Corp. (IBM) rose 0.8 percent as Warren Buffett told CNBC that his company, Berkshire Hathaway Inc. (BRK/A), bought a 5.5 percent stake. The holding of about 64 million shares was acquired mostly in the third quarter and cost more than $10 billion, Buffett said.
Lowe’s Cos. rallied 2.7 percent to $23.74. The second- largest U.S. home-improvement retailer reported third-quarter profit that exceeded analysts’ estimates, helped by sales at older stores.
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