The Spanish financial flu hit stocks in Europe and the U.S. today.
On Wall Street, the S&P Retail Index fell 0.5 percent, or 3.04 points, to 614.09 as the Dow Jones Industrial Average declined 0.8 percent, or 101.11 points, to 12,721.46.
The decliners included The Wet Seal Inc., which fell 10.1 percent to $2.66 after chief executive officer Susan McGalla left the firm; Zale Corp., 4.6 percent to $2.70; Express Inc., 4.4 percent to $16.90, and Fifth & Pacific Cos. Inc., 4.2 percent to $9.77.
The selloff echoed a more severe drop in Europe, where investors fretted over Spain’s financial situation. More of the country’s troubled regions are believed to be preparing to ask for a bailout following Valencia’s request for financial assistance Friday.
Spain’s 10-year bond yield rose to 7.5 percent today, a record high during its time in the euro and a level widely viewed as unsustainable.
The DAX in Frankfurt led the decline, sinking 3.2 percent to 6,419.33, followed by the CAC 40 in Paris, down 2.9 percent to 3,101.53. The FTSE MIB in Milan slumped 2.8 percent to 12,706.36 and FTSE 100 in London was down 2.1 percent to 5,533.87.
Investors were also said to worry anew over a possible Greek exit from the euro.
In light of the stock retreat, Spain banned the short-selling of shares for the next three months, while Italy has banned short-selling of certain financial stocks for a week. Short selling allows investors to benefit when stock prices fall.
Fashion, luxury and retail stocks were caught in the stock slide. Among those that lost the most ground were Aeffe, down 5.8 percent to 0.49 euros; Carrefour, 4.3 percent to 13.35 euros; Ferragamo, 3.5 percent to 14.79 euros, and Mulberry, 3.9 percent to 13.93 pounds.
The pound traded at $1.56 Monday, while the euro went for $1.21.