By and  on December 12, 2011

Investors pushed markets down today and kept a wary eye on the European Union's plan to draw closer together — even as Britain, which has a key international financial hub in London, seeks to distance itself.

Milan’s FTSE MIB tumbled 3.8 percent to 14,896.73, while the DAX in Frankfurt sank 3.4 percent to 5,785.43. The CAC 40 in Paris slumped 2.6 percent to 3,089.59, while the FTSE 100 in London retreated 1.8 percent to 5,427.86.

Among the stocks losing ground were Safilo Group, which tumbled 5.9 percent to 4.85 euros; Tod’s, which sank 3.1 percent to 64 euros; Hugo Boss, which retreated 3.6 percent to 56.65 euros, and Burberry Group, which slumped 3.2 percent to 12.23 pounds. The euro traded at $1.32 while the pound traded at $1.56.

British prime minister David Cameron was the target of cheers — and jeers — in parliament as he defended his decision to reject a new EU fiscal pact.

“We went seeking a deal…and I was genuinely looking to reach an agreement with the necessary safeguards for Britain,” Cameron told fellow parliamentarians Monday. He later explained that he did not get the financial safeguards that he was seeking for the city of London, so he snubbed the deal.

Meanwhile, French president Nicholas Sarkozy told Le Monde newspaper that there are now “two Europes,” referring to Cameron’s decision not to participate in the new fiscal pact that foresees a tighter union and more strict budgetary rules among the EU member states.

And debt-rating agency Moody's Investors Service said it would revisit all of the EU's sovereign ratings in the first quarter.

"This is because the absence of measures to stabilize credit markets over the short term means that the Euro area, and the wider EU, remain prone to further shocks and the cohesion of the Euro area under continued threat," Moody's said.

Wall Street traders were sufficiently spooked and pushed the S&P Retail Index down 0.6 percent, or 3.13 points, to 533.48, as the Dow Jones Industrial Average dove 1.3 percent, or 162.87, to 12,021.39.

The decliners included Abercrombie & Fitch Co., down 2.2 percent to $49.38; Dillard's Inc., 2.1 percent to $46.91; Ann Inc., 2 percent to $24.53, and The Warnaco Group Inc., 1.1 percent to $51.57.

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