The US markets declined on Monday, as investors reacted to political uncertainty in Europe and a report alleging that Wal-Mart Stores Inc. hindered an investigation of bribery in Mexico. Also, the mounting concern over Europe’s ability to get a handle over its sovereign debt will derail global growth and the combination of some weaker-than-expected US economic reports has led to increased volatility. Wal-Mart Stores Inc. was under pressure after the firm stated over the weekend that it is looking into a newspaper’s claims that employees at a subsidiary bribed Mexican officials over several years.
Besides, Euro-area services and manufacturing contracted more than estimated, while data indicated China’s production will shrink for a sixth month. Euro-area services and manufacturing declined, according to a Market Economics index that fell to a five-month low of 47.4. Also, the French President Nicolas Sarkozy lost the first round of his re-election bid, with the politician facing an uphill battle in a May 6 runoff against François Hollande, the Socialist front-runner in Sunday’s balloting. Hollande has vowed to renegotiate a deficit-cutting agreement touted by German Chancellor Angela Merkel that has yet to be ratified. While Dutch Prime Minister Mark Rutte offered his cabinet’s resignation amid a revolt against spending cuts. Separately, the Netherlands may face another election after the opposition Freedom Party led by Geert Wilders withdrew its support to the country´s ruling coalition in protest at the government´s proposed austerity budget of nearly €10 billion.
The Dow Jones Industrial Average closed lower by 102.09 points, or 0.78 percent, at 12,927.20. The S&P 500 lost 11.59 points, or 0.84 percent, at 1,366.94, while the Nasdaq was down by 30.00 points, or 1.00 percent, at 2,970.45.
Indian ADRs closed in red on Monday; HDFC Bank was down 1.23%, Infosys Technologies was down 0.99%, Dr. Reddy’s Lab was down 0.55%, ICICI Bank was down 0.38% and Tata Motors was down 0.29%.