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European debt worries drag Dow below 10,000

Traders work on the floor of the New York Stock Exchange on Friday. The Dow Jones Industrial Average moved by triple digits for the 10th time in 16 trading days Monday, when it lost almost 104 points.

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Traders work on the floor of the New York Stock Exchange on Friday. The Dow Jones Industrial Average moved by triple digits for the 10th time in 16 trading days Monday, when it lost almost 104 points.

NEW YORK — The Dow Jones Industrial Average closed below 10,000 for the first time in three months Monday on nagging concerns about debt loads in Europe.

The Dow, which lost almost 104 points Monday to close at 9,908.39, had its 10th triple-digit move in 16 trading days. Shares of big banks pulled the market lower, extending a slump that has led to four straight weekly losses.

Mounting deficits in weaker European economies including Greece, Portugal and Spain have raised questions about the health of the global financial system. That compounded concerns about growth in China and proposed U.S. bank regulations and has taken the market down from a 15-month high reached in January.

Greece's finance minister said Monday the government is preparing to boost some taxes to shore up its finances. But civil servants opposed to cutbacks have pledged to strike Wednesday.

Brett Hryb, a portfolio manager with MFC Global Investment Management in Toronto, said the latest concern is that the financial troubles in a country like Greece, whose economy is small compared with the rest of Europe, will spill into other countries.

"Clearly, Greece itself is nothing. It's just a blip. It's what the contagion could be," he said.

Monday's drop extends the stumble the market began in mid January. At that time, China announced plans to contain economic growth and the Obama administration proposed rules to restrict trading by large financial institutions.

The broader Standard & Poor's 500 index fell 9.45, or 0.9 percent, to 1,056.74, while the Nasdaq composite index fell 15.07, or 0.7 percent, to 2,126.05.

Questions about the global economy have interrupted a 10-month climb in stocks, which hit 12-year lows last March. The Dow is down 817 points, or 7.6 percent, from its recent high of 10,725.43 on Jan. 19.

Jerry Webman, chief economist at OppenheimerFunds Inc., said he doesn't expect that problems with rising debt loads in Europe will cascade into other parts of the world's economy, but he remains cautious.

"Right now, when anybody says the word 'contained,' I start to tremble," he said, referring to his skepticism about those who downplay worries about Greece and other countries with rising deficits.

European debt worries drag Dow below 10,000 02/08/10 [Last modified: Monday, February 8, 2010 8:53pm]
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