Global stock markets continued to wobble Tuesday as investors nervously eyed Europe’s morass of public debt and the still-weak U.S. job market.
Italy, which on Monday had to intervene in markets and curtail short selling as stocks fell, successfully raised 6.75 billion euros, or $9.5 billion at current exchange, by selling one-year treasury debt. Although the country had to pony up for the cash, paying an average yield of 3.67 percent, the vote of confidence helped the Milan Bourse to rebound 1.3 percent to 18,528.96, breaking a string six losing trading sessions.
Italy’s mounting debt came to the fore this week as Greece struggled to secure a second bailout from its European Union neighbors.
Underlining the precariousness of the bloc’s fiscal challenges, Moody’s Investors Service downgraded Ireland’s government bonds to junk status, bringing their rating down one notch to “Ba1” from “Baa3.” The debt watchdog said that given Greece’s experience, it was likely that private holders of Ireland’s debt would be asked to share some of the burden should the country also need a second bailout.
The FTSE 100 fell 0.9 percent to 5,876.47 in London as the CAC 40 declined 0.9 percent to 3,774.12 in Paris and the DAX dropped 0.8 percent to 7,174.14 in Frankfurt.
In the U.S., the S&P Retail Index dipped 0.2 percent to 543.93 and the Dow Jones Industrial Average fell 0.5 percent to 12,446.88.
Minutes from the Federal Reserve’s Open Market Committee meeting last month showed that the weak employment market continues to worry officials.
“The recent deterioration in labor market conditions was a particular concern for…participants because the prospects for job growth were seen as an important source of uncertainty in the economic outlook, particularly in the outlook for consumer spending,” according to the meeting’s minutes, released Tuesday.
The U.S. added just 18,000 jobs last month.