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U.S., European Stocks Decline

Manufacturing slips in U.S., Moody’s cuts European Union’s credit outlook.

Stocks sank in both the U.S. and Europe today as economic jitters riled markets.

 

On Wall Street, the S&P Retail Index held up relatively well, slipping 0.2 percent, or 1.18 points, to 647.08 as trading settled. The Dow Jones Industrial Average fell 0.4 percent, or 54.90 points, to 13,035.94.

 

The decliners included The Bon-Ton Stores Inc., down 7.5 percent to $9.70; Abercrombie & Fitch Co., 2.9 percent to $34.95, and Tiffany & Co., 2.4 percent to $60.49.

 

Investors were spooked by the Institute for Supply Chain Management’s report that U.S. manufacturing activity contracted last month for the third time since July 2009, although the overall economy continued to grow.

 

The pain was more acute in Europe, where Moody’s Investors Service cut its outlook for the European Union’s “AAA” credit rating to negative and said the rating itself could ultimately be slashed.

 

The CAC 40 in Paris sank 1.6 percent to 3,399.04, followed by the FSTE 100 in London, which was down 1.5 percent to 5,672.01. The DAX in Frankfurt sank 1.2 percent to 6,932.58, followed by the FTSE MIB in Milan, which edged down 0.2 percent to 15.237.72.

 

Losing ground were Burberry Group, down 3 percent to 13.15 pounds; Carrefour, 2.6 percent to 16.43 euros, and LVMH Moët Hennessy Louis Vuitton, 1.7 percent to 127.80 euros.

 

The euro traded at $1.26 while the pound went for $1.59 and the Swiss franc for $1.04.

 

The week had already begun on a sour note for the euro zone. On Monday, Markit’s Purchasing Managers Index showed manufacturing output across the region shrank once again in August.

 

However, there may be some good news later this week. The European Central Bank will meet on Thursday to discuss monetary policy. The bank is expected to lay out plans to buy government bonds from Spain and Italy in a bid to lower those countries’ interest rates.