Fears about Italy help drive stocks lower

By msnbc.com news services

Stocks traded lower entering the afternoon session Monday amid worries that Italy?s debt issues would be too much for the European Union to resolve.

Approaching 12:30 p.m. Eastern, the Dow Jones Industrial Average was off 0.8 percent. The S&P 500 was down 0.9 percent. The Nasdaq was 1.3 percent lower.

Italian Prime Minister Silvio Berlusconi, under pressure from markets and rebels in his party, fought to hang on to power and denied reports he would resign within hours. Party rebels threatened to bring down his government in a backlash over its failure to adopt reforms to defuse a debt crisis.

Italy?s public debt, by percentage, is one of the largest of any country in the world.

"As soon as Greece looks like we can now sort of digest the risk right off the issues, in comes the 800-pound gorilla into the room. Italy is a much, much larger concern, with issues that have been lingering for decades," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

"This is not something you can cordon off. Italy is central to the European zone and it is going to force the European Union to recalibrate everything that has been taken for granted thus far in the conversation."

Monday is a relatively quiet day for economic and corporate news in the U.S. The Federal Reserve will report in the afternoon on how much consumers borrowed in September. Economists expect consumers took out an additional $5.4 billion in loans, a sign that households could be more confident in the direction of the economy.

CNBC's Michelle Caruso-Cabrera leads a discussion of what the Eurozone's troubles could mean for the U.S. economy.

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Source: http://bottomline.msnbc.msn.com/_news/2011/11/07/8682937-fears-about-italy-help-drive-stocks-lower

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