February 25, 2013

Stocks plummet as Italy heads for political disarray

The Associated Press

(Continued from page 1)

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Specialist Robert Canzani, right, works at his post on the floor of the New York Stock Exchange Monday, Feb. 25, 2013. (AP Photo/Richard Drew)

"The market is extremely overbought, it's been overbought since the beginning of this year," says Lance Roberts, chief economist at Streettalk Advisors in Houston, Texas.

US Bank Wealth Management's Russell says many investors were already jittery because the big jump in stocks. Now they have two reasons to sell: Italy, and the automatic budget cuts set to take effect Friday if lawmakers do not hammer out a debt-reduction deal.

"Markets have probably gone up too far, too fast," Russell says. "They were due for pause."

European stocks gave back much of their early gains. Benchmark indexes rose 0.4 percent in France, 1.5 percent in Germany and 0.8 percent in Spain.

Britain's index was up just 0.3 percent after Moody's stripped the country late Friday of its triple-A credit rating.

Among other stocks making big moves:

— Drugmaker Affymax plunged $14.10, or 85 percent, to $2.42 after the company recalled its anemia drug following severe allergic reactions and the deaths of some kidney dialysis patients.

—Mead Johnson fell $3.64, or 4.6 percent, to $75.32 after the company said that a new regulation in Hong Kong could affect the company's sales there as well as in mainland China.

— Barnes & Noble rose $1.55, or 12 percent, to $15.06 after founder and chairman Leonard Riggio told the bookseller he is going to try to buy the company's retail business.

— Hertz advanced 31 cents, or 1.7 percent, to $19.04, despite posting a fourth-quarter loss, after the rental car company said that pricing improved, volume rose and it cut costs.

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