U.S. stocks slumped Wednesday as the yield on Italian bonds soared, signaling investors are losing faith in one of the world’s biggest sovereign-bond markets.
A basket of 30 footwear stocks tracked by Footwear News fell an average of 3.5 percent in trading, roughly in line with how much the benchmark indexes declined.
Just three small-cap companies — Auri Inc., LaCrosse Footwear Inc. and R.G. Barry Corp. — saw their shares rise. One, Bakers Footwear Group Inc., was flat.
Leading the declines of 26 companies were The Jones Group Inc., Brown Shoe Co. and Hibbett Sports Inc., which all closed 7 percent lower.
The median decrease was 4.6 percent. Firms including Foot Locker Inc., Steven Madden Ltd., Genesco Inc. and Collective Brands Inc. registered declines within 0.3 percentage points of this figure.
The dent in market sentiment reflected global jitters stemming from the continued crisis in the eurozone. Italian Prime Minister Silvio Berlusconi had pledged Tuesday to step down after Parliament approves austerity measures intended to reassure investors and ensure that Italy remains able to borrow, but debt prices plunged anyway after clearinghouse LCH.Clearnet made it more expensive to trade the country’s bonds.
Things also did not go smoothly in Greece, where the country’s two main parties failed to agree on who will lead an interim government after Prime Minister George Papandreou also announced he was stepping down from his post.
The Dow Jones Industrial Average plunged 389.24 points, or 3.2 percent, to 11,780.94, marking the biggest one-day decline since mid-September. The Standard & Poor’s 500 index fell 46.82 points, or 3.7 percent, to 1,229.1.
The losses wiped out the previous two days’ gains and pushed the major indexes into negative territory for the month.