US stocks slump on eurozone debt fears

NEW YORK: US stocks skidded Monday amid a global sell-off on renewed eurozone sovereign debt concerns that Spain was headed for a bailout and Greece could exit the eurozone.

Spain's borrowing costs struck highs considered unsustainable, sparking fears that the eurozone's fourth-largest economy may require a bailout.

"Growing anxiety over a potential bailout for Spain and a flare-up in Greek default and eurozone exit worries set off a global sell-off in equities today, with markets in the US also succumbing, but able to come off the worst levels of the day," said Charles Schwab & Co analysts.

Stocks were mired in red from the opening bell, tracking declines in European markets.

The Dow Jones Industrial Average recovered from a loss of over 200 points to close at 12,721.46, down 101.11 points, or 0.79 percent, putting in a second straight day in negative territory.

The S&P 500, a broad measure of the markets, fell 12.14 points (0.89 percent) to 1,350.52, while the tech-rich Nasdaq dived 35.15 points (1.20 percent) to 2,890.15.

The US economic calendar was bare.

Dow member McDonald's added to the gloom by revealing disappointing second-quarter earnings. The fast-food giant's shares plunged 2.9 percent.

Oilfield services giant Halliburton bucked the downturn, adding 2.4 percent after posting earnings that topped Wall Street estimates.

ExxonMobil lost 0.9 percent as oil futures prices fell more than 3.0 percent.

A massive Chinese-Canada takeover deal in the energy sector was in focus.

Chinese state-owned oil and gas giant CNOOC Ltd will buy Canadian oil company Nexen for US$15.1 billion, the two companies announced.

The cash deal, subject to regulatory approval, would be China's largest foreign commercial purchase to date.

CNOOC's US-traded shares dropped 4.3 percent, while Nexen's soared 51.8 percent to US$25.90 on the New York Stock Exchange.

Apple slipped 0.1 percent. An appeals court on Monday sided with bankrupt photo pioneer Eastman Kodak by endorsing a US International Trade Commission move rejecting claims it infringed on two Apple patents. Kodak dropped 7.0 percent to 24 cents in over-the-counter trade.

The Wall Street rout extended Friday's losses spurred by worries about Spain's fiscal health. The Dow lost 0.9 percent. -- AFP