NEW YORK?? Wall Street fell sharply at Tuesday?s opening bell amid fears that the euro zone's sovereign debt crisis is worsening and the U.S. economy is slipping back into a recession.
The Dow Jones industrial average was down over 250 points in the early going, but was lately working off its early low.
European shares fell in a choppy Tuesday session, reversing earlier gains, with banks exposed to the euro zone peripheral among the worst performers as political discord around the handling of the regional debt crisis grew.
The region's stocks tumbled 4 percent on Monday, with financial issues falling to their lowest in more than two years. U.S. markets were closed for the Labor Day holiday on Monday.
Swiss shares bucked the trend, boosted after Switzerland's central bank intervened to drive down the value of the franc, buoying exporter shares such as Transocean Ltd.
Asian equities fell on fears Europe could trigger a second full-blown banking crisis.
"Europe's problems are our problems. We have concerns about the slowdown in the emerging markets, specific to Asia. We have a euro zone that is an apoplectic frenzy of just trying to right the ship," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.
"If you can find some stabilizing influence in the euro zone to give the global markets some confidence, I'd be shocked."
The New York Stock Exchange and NYSE Amex Cash Markets invoked a rule to smooth trading.
Story: US service sector continued to expand in Aug., but still weakRule 48 allows the exchange to suspend price indications that help determine the floor price at the open during regular sessions. Bypassing the requirement helps speed the beginning of trading.
Among the triggers for invoking the rule are ?substantial activity in the futures market before the open,? according to the exchange?s website.
Stocks edged off their earlier lows on news that the service sector grew at slightly faster pace in August compared to July, but remains weak. The Institute for Supply Management?s August non-manufacturing index showed a reading of 53.3 versus the 52.7 in the prior month. A number above 50 indicates expansion in the sector.
On Monday, data from the euro zone, Britain, China and India suggested growth in global service sector activity was slowing.
President Barack Obama will unveil a major jobs program in a speech to Congress on Thursday. He previewed his proposals for new infrastructure spending and an extension of payroll tax cuts on Monday.
"There is a buildup to the President's jobs speech which the market knows will lead to more questions than answers. There is a real lack of clarity politically in terms of what actually can get accomplished with anything he proposes," said Kenny.
In other news, private-equity giant Carlyle Group filed documents to become a public company. Also, International Paper will reportedly buy Temple-Inland for $4.3 billion.
Big U.S. banks, in talks with state officials on settling claims of improper mortgage practices, have been offered a deal that could limit legal liability in return for a multibillion-dollar payment, the Financial Times reported.
Bank of America Corp lost 4.6 percent to $6.92 and JPMorgan Chase & Co fell 3.6 percent to $33.37.
The Associated Press and Reuters contributed to this report.
Source: http://www.msnbc.msn.com/id/44406025/ns/business-stocks_and_economy/
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