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Stocks fall on worries about U.S. broker, Europe
by Matthew Craft AP Business Writer
Nov 01, 2011 | 833 views | 0 0 comments | 5 5 recommendations | email to a friend | print


NEW YORK (AP) — Despite being known as a jinx month for the stock market, this October is shaping up to be one of the best months on record. The main reason is progress in Europe toward containing that region’s debt crisis.

The Standard & Poor’s 500 index has gained 12 percent for the month, which puts the broadest stock-market measure on track for its best month since January 1987. Despite a decline early Monday, the Dow Jones industrial average is still up 10.8 percent in October, its best month since August 1982.

The big breakthrough on Europe came early Thursday of last week, when European leaders reached a far-ranging agreement to shore up the region’s banks and prevent a debt crunch in Greece from bringing down the financial system there.

But a lack of many key details in the plan has made markets jittery again, and on Monday fresh reminders of how the Europe crisis can affect U.S. financial institutions helped bring the market lower.

Bank stocks fell broadly Monday after the securities firm MF Global filed for bankruptcy protection. Last week the company’s debt was downgraded to junk status by ratings agencies concerned about its large holdings of European government debt. The company is headed by former New Jersey Governor and Goldman Sachs chairman Jon Corzine.

Bank of America fell 4 percent, the most in the Dow. Citigroup fell 5.5 percent and Morgan Stanley fell 5.4 percent.

Ninety minutes after the opening bell, the Dow was down 123 points, or 1 percent, to 12,109. The decline comes after the Dow closed out its fifth straight week of gains, its best winning streak since January.

The Standard & Poor’s 500 index was down 13, or 1 percent, to 1,271. Energy and materials companies led the decline. The Nasdaq is down 21, or 0.8 percent, to 2,715.

October has become known as a famously bad month for stocks. The October 1929 crash divided the roaring 1920s from the Great Depression of the 1930s. It’s the month that has given the market two black eyes: Black Tuesday in 1929 and Black Monday in 1987.

The Organization for Economic Cooperation and Development warned Monday that European economies will see a “marked slowdown” next year. The organization called on the European Union to provide more information on how it plans to stem the debt crisis.

Major stock indexes dropped in Europe. Germany’s DAX fell 2.4 percent. France’s CAC-40 dropped 2.1 percent. Both are still up sharply for October. The German index is up 12.9 percent, the French one 10 percent.

The European debt crisis is still far from fixed. One troubling sign is that borrowing costs for Italy and Spain have increased, a signal that traders remain worried about their ability to pay their debts.
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