The familiar bogeyman of financial trouble in Europe helped to knock stocks lower on Monday, with the SP 500 index and SPY ETF that tracks it down 0.82%. Stocks managed to rally after hitting their lows in the morning on news that French President Nicolas Sarkozy had lost the first round of France’s presidential election to socialist opponent Francois Hollande, and that Prime Minister Mark Rutte had resigned over austerity measures in the Netherlands.
The euro and its FXE proxy fell 0.48%. European banks were hit hard, with Deutsche Bank and Societe Generale both down 3.7%. U.S. banks weren’t as badly bruised. The XLF was down 0.7%, Citibank was lower by 1.9%, Bank of America retreated 2.1% and Morgan Stanley declined 2.9% in price. Goldman Sachs escaped with only a light dusting, its shares down 0.6% on the day.
Compounding problems in the United States was a 4.7% drop in Wal-Mart shares after allegations of widespread bribery in Mexico and a possible cover-up. If guilty of violating the Foreign Corrupt Practices Act, Wal-Mart could face penalties of 1% to 2% of annual sales, according to UBS. That would total $4.5 billion to $9 billion.
As you see in the Market Blaster video above, Apple is set to announce results of the January-March quarter on Tuesday afternoon. The stock closed lower by 0.22% at $571.70 after trading as low as $556.62 before noon. Apple shares are down 11% since hitting an intraday high of $644 on April 10. Also in the Blaster, Kellogg says 2012 will not be great for sales growth and its shares get pounded 6% lower.
Netflix reported earnings that beat expectations after the close of trading, but the stock got hammered, trading 16% lower after-hours at $85.40. The company warned that subscriber growth may slow in the months ahead, even though sales were up 21% to $869.8 million, ahead of the $865.5 million average of analysts’ forecasts.
Another rocket stock reporting quarterly results on Tuesday is Chinese Web portal, Baidu.com. BIDU dropped 3.6% on Monday to close at $139.66. It bottomed out at $9 in the 2008-2009 bear market, making its three-year run even more impressive than Apple’s sprint from $78 on January 20, 2009.