U.S. stocks drop on Europe concerns, Wal-Mart
France’s elections, Netherlands turmoil weigh on global markets
NEW YORK (MarketWatch) — U.S. stocks went into widespread retreat Monday as investors reacted to political uncertainty in Europe and a report alleging that Wal-Mart Stores Inc. hindered an investigation of bribery in Mexico.
Wall Street’s strong advance in the first quarter left it vulnerable to large hits to the downside, analysts say.

“The problem is the market accelerated so fast in the first quarter that it got ahead of itself. If the market were only up 6% in the first quarter, there wouldn’t be this red alert going out every time there was a headline out of Europe or one data point here,” said Ann Miletti, senior portfolio manager for Wells Fargo Advantage Funds.

The combination of some weaker-than-expected U.S. economic reports and the lack of clarity over Europe’s ability to get a handle over its sovereign debt has led to increased volatility, she added.

“The market is now wondering if Q1 was just a pull forward because of good weather,” according to Miletti, who cautioned against reading too much into a small window of indicators.

The Dow Jones Industrial Average WMT -4.66% ended down 102.09 points, or 0.8%, at 12,927.17, with shares of Wal-Mart WMT -4.66% hardest hit among the index’s 30 components. All but three stocks closed lower.

The discount retailer’s shares fell 4.7%, their worst day since August, after the New York Times reported that top executives at a subsidiary allegedly undertook a large-scale bribery campaign to construct stores across Mexico. Read more on Wal-Mart’s Mexican affiliate.

“These fines could be up toward $1 billion when you look at the crimes they are being accused of,” said Art Hogan, head of product strategy at Lazard Capital Markets.

The S&P 500 Index SPX -0.84% declined 11.59 points, or 0.8%, at 1,366.94, with consumer staples battered the most among the index’s 10 industry groups. All closed with losses; energy performed the best.
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