Wall Street flat as Italy budget woes hit Europe, boost dollar

The dollar index rose 0.25 per cent.— Reuters pic

NEW YORK, Sept 29 ― The US dollar rose yesterday as the euro fell on deepening worries about an Italian budget with a higher-than-expected deficit target, which also slammed European stocks.

Wall Street ended flat, pulling back from early gains after Facebook disclosed a security breach. Tesla shares lost 13.9 per cent after US regulators sued Chief Executive Officer Elon Musk in a fraud complaint that seeks to remove him as CEO.

In Italy, the government on Thursday targeted a budget deficit of 2.4 per cent of gross domestic product for the next three years, marking a victory for party chiefs over Economy Minister Giovanni Tria, an unaffiliated technocrat.

Although the deficit is within the prescribed EU limit of 3 per cent of GDP, investors fear that Italy’s anti-establishment government is not committed to tackling its huge debt load. Italy’s debt-to-GDP ratio stands at about 130 per cent, the second highest in the euro zone, behind Greece.

The pan-European FTSEurofirst 300 index lost 0.83 per cent. Shares in Italian banks fell as much as 8.5 per cent and closed 7.26 per cent lower.

Italian government bonds were set for their worst day since a brutal May 29 sell-off, up 34-42 basis points across the curve.

The euro fell 0.31 per cent to US$1.1603 (RM4.8027). MSCI’s gauge of stocks across the globe shed 0.23 per cent.

Wall Street in the morning rose, as the tech sector got a boost from gains in Nvidia Corp after Evercore raised the chipmaker’s share price target to US$400.

The Dow Jones Industrial Average rose 18.38 points, or 0.07 per cent, to 26,458.31, the S&P 500 lost 0.02 point, or -0.00 per cent, to 2,913.98 and the Nasdaq Composite added 4.39 points, or 0.05 per cent, to

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