Dow plummets over worries of political turmoil in Italy

PHOTO: Trader Peter Tuchman works on the floor of the New York Stock Exchange, May 29, 2018.PlayRichard Drew/AP
WATCH Dow plummets over worries of political turmoil in Italy

The Dow Jones Industrial Average tanked nearly 400 points on Tuesday as turmoil over a political crisis in Italy triggered fears that it could spread to financial woes throughout Europe.

The Dow tumbled 391 points to 24,361. The S&P 500 fell 32 points to 2,689 while the Nasdaq Composite slipped 37 points to 7,396.

PHOTO: Trader Patrick Casey, center works on the floor of the New York Stock Exchange, May 29, 2018.Richard Drew/AP
Trader Patrick Casey, center works on the floor of the New York Stock Exchange, May 29, 2018.

At one point the Dow was down more than 500 points.

Concerns over Italy erupted when President Sergio Mattarella, who has been pro-European Union, vetoed the appointment of Paolo Savona as the country's finance minister, angering members of the populist government. Savona is a strong critic of the euro and was the choice of the two anti-establishment political parties, the Five Star Movement and League Party.

PHOTO: Italys President Sergio Mattarella addresses journalists after a meeting, May 27, 2018, at the Quirinale presidential palace in Rome.Vincenzo Pinto/AFP/Getty Images
Italy's President Sergio Mattarella addresses journalists after a meeting, May 27, 2018, at the Quirinale presidential palace in Rome.

Following Mattarella's decision, both parties abandoned their attempts to form a government, prompting widespread speculation that a more radical faction will gain a stronger foothold in the government.

Mattarella made no excuses for his decision.

"The uncertainty over our position in the euro alarmed Italian and foreign investors," Mattarella said.

PHOTO: Trader Gregory Rowe, left, and specialist John McNierney work on the floor of the New York Stock Exchange, May 29, 2018.Richard Drew/AP
Trader Gregory Rowe, left, and specialist John McNierney work on the floor of the New York Stock Exchange, May 29, 2018.

He said rising Italian sovereign debt, which is about $3 trillion, will cause Italy to continue to dip into its savings and hurt companies.

"Membership of the euro is a fundamental choice for the future of our country and our young people," Mattarella said.

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