Wall Street closed in the red because of concerns about Italy, bank losses

NEW YORK, May 30 (Reuters) – US indices S&P 500 and Dow Jones Industrial Average showed the maximum one-day decline in percentage terms for the month following Tuesday’s trading, as political uncertainty in Italy raised concern about the stability of the euro zone, banks of the USA.

Italy can not form a coalition government after the March elections, which pointed to the growth of support for populist parties advocating a way out of the eurozone. Acting Prime Minister Carlo Cottarelli could not enlist the support of the country’s largest political parties.

The political crisis in Rome and the threat it poses to the euro area triggered the flight of investors to asylum assets, such as US bonds, which led to a decrease in the yield of 10-year Treasury government bonds and put pressure on US bank shares. Banking index S & P 500 showed the maximum one-day decline in more than two months, following the session lost more than 4 percent.

The Dow Jones closed the session down 1.58 percent to 24,361.45 points, the S & P 500 index – by 1.16 percent to 2.689.86 points, the Nasdaq Composite index – by 0.5 percent to 7.396.59 points.

Pressure on the securities of US banks was also caused by pessimistic forecasts and indicators of JPMorgan Chase & Co (NYSE:JPM) and Morgan Stanley (NYSE:MS). The head of corporate and investment banking JPMorgan said that the bank’s market revenue in the second quarter will not change compared to a year earlier. One of the leaders of private capital management Morgan Stanley said about the slowdown in activity since March, it follows from the report https://www.cnbc.com/2018/05/29/morgan-stanley-shares-drop-after-executive-outlines-challenges.html CNBC.

Shares of JPMorgan Chase fell by 4.3 percent, while Morgan Stanley fell by 5.8 percent.