--Stocks erase initial gains after Spain's request for bailout funds
--Europe off highs but remain broadly higher, with Spain leading gains
--Asia markets start overseas rally with sharp gains
NEW YORK--U.S. stocks erased initial gains within an hour of the
opening bell, as investors took a critical look at Spain's weekend
agreement to seek bailout funds for its banks.
The Dow Jones Industrial Average fell 14 points, or 0.1%, to 12540 in
mid-morning trade. The blue-chip average had risen as much as 96
points minutes after U.S. markets opened.
The Standard & Poor's 500-stock index eased one point, or 0.1%, to
1325. Materials shares led declines across seven of the index's 10
sectors. The Nasdaq Composite fell six points, or 0.2%, to 2852.
"I think the market had sort of assumed that Spain was going to
capitulate, because it really had no alternative," said Ben
Halliburton, managing director at Tradition Capital Management in
Summit, N.J. "It doesn't really solve any of the problems; it just
pushes back the day of reckoning."
Over the weekend, Spain agreed to a bailout of up to EUR100 billion
($125 billion) in loans from the European Union to assist its banks.
European stock markets' initial rallies eroded Monday as investors
questioned the implications of the deal. The Stoxx Europe 600 was up
0.6% after trading as much as 1.9% higher. Spain's IBEX-35 saw a 5.9%
rally cut to a gain of 0.7%.
Asian markets rallied amid the Spain news and Chinese economic data
that were not as bad as some expected, with Japan's Nikkei Stock
Average rising 2% and China's Shanghai Composite gaining 1.1%.
In the corporate arena, IntegraMed America rallied 21% after the
health-care management company said it was being acquired by Sagard
Capital Partners in a $169.5 million deal.
Centene tumbled 26%. The Medicaid insurer lowered its 2012 earnings outlook.
Forest Laboratories eased 2% after lowering its current-year earnings
forecast, saying it was hit harder than expected after its depression
treatment Lexapro lost patent protection in March.
Diamond Foods dropped 6.8%. The snack maker said it won't meet a
deadline to file its delayed quarterly reports and expects to get a
delisting warning from the Nasdaq Stock Market, the latest fallout
from accounting irregularities unveiled last year. The accounting
problems led to the firing of top executives in February and the
nixing of its planned purchase of Pringles from Procter & Gamble.
EnergySolutions shed 55% after the provider of nuclear-power services
such as plant decommissioning lowered its outlook, citing a slowdown
in government and commercial businesses.
Write to matthew.jarzemsky@dowjones.com
(END) Dow Jones Newswires
June 11, 2012 06:55 ET (10:55 GMT)
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