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Italian leader's resignation announcement rattles financial markets

December 10, 2012|By Andrew Tangel
  • A man checks a monitor with stock exchange data in Milan, Italy.
A man checks a monitor with stock exchange data in Milan, Italy. (Luca Bruno / Associated…)

NEW YORK -- Italian Prime Minister Mario Monti's announcement that he would soon step down spooked the country's financial markets Monday, highlighting the European economy's continuing fragility.

Italy's benchmark FTSE MIB stock index dropped 345 points, or 2.2%, to 15,354.

Yields on the country's 10-year bond, meanwhile, jumped -- a sign of investor worry. The 10-year note saw its largest intra-day increase since September 2011, according to Tradeweb, with yields closing at 4.83%, up from 4.55% at Friday's close.

Monti tried to reassure investors Monday, saying they shouldn't expect his departure to cause market turmoil, Bloomberg News reported. The prime minister announced he would resign once Parliament passes his budget later this month.

Major U.S. stock indexes, meanwhile, were up slightly late in the trading day.

The Dow Jones industrial average was up 12 points, or 0.1%, to 13,167. The Standard & Poor's 500 index was up less than a point, or 0.1% to 1,419. The Nasdaq was up 3 points, or 0.1%, 2,981.

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