Europe’s stock markets retreated today as students in Italy took to the streets to protest the new government’s austerity measures. And in Spain, the yield on government bonds hit a new high, edging close to the dangerous 7 percent threshold.
Paris’ CAC 40 tumbled 1.8 percent to close at 3,010.29, followed by London’s FTSE 100, which fell 1.6 percent to 5,423.14. Milan’s FTSE MIB retreated 1.4 percent to 15,198.31 and Frankfurt’s DAX sank 1.1 percent to 5,850.17.
Retail and luxury stocks were mostly down, with a few exceptions, including Italian eyewear maker Marcolin, which jumped 3.4 percent to close at 3.68 euros and Metro, which rose 1.5 percent to close at 35.85 euros. Among the decliners were French Connection, which tumbled 16.9 percent to 0.61 pence after releasing a profit warning earlier in the day; Burberry, which fell 4 percent to 12.69 pounds, and ASOS.com which sank 5.5 percent to 13.15 pounds.
The euro traded at 1.35 while the pound traded at 1.58 against the dollar.
Interest rates on the latest batch of 10-year Spanish bond were 6.975 percent — the highest since 1997, and perilously close to the 7 percent threshold that triggered bailout talks for Greece and Ireland.
In midafternoon trading, the S&P Retail Index was down 1.7 percent, or 9.09 points, to 529.51 and the Dow Jones Industrial Average was off 1.3 percent, or 156.13 points, to 11,749.46. The retail decliners included Casual Male Retail Group, which fell 11.2 percent to $3.33 after the firm posted an unexpected quarterly loss, and Sears Holdings Corp., which fell 4 percent to $65.56 on wider quarterly losses. Also losing ground were Guess Inc., down 4.2 percent to $28.77 and Limited Brands Inc., off 2.8 percent to $41.78.