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At the open: Stocks drop on Europe concern

A trader reacts at his desk at the Frankfurt stock exchange August 19, 2011.

ALEX DOMANSKI/Alex Domanski/Reuters

North American stocks fell on Monday morning, extending declines across Europe after Moody's Investors Service said it will review credit ratings of European countries.

The Dow Jones industrial average dropped 115.72 points, or 0.9 per cent, to 12,068.54. The broader S&P 500 sank 14.11 points, or 1.1 per cent, to 1,241.08. In Canada, the S&P/TSX composite index lost 139.17 points, or 1.2 per cent, to 11,895.58.

The declines followed index retreats across Europe after Moody's said last week's meeting of the region's top politicians failed to resolve the debt crisis that's threatening to unravel the European Union.

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"The absence of measures to stabilize credit markets over the short term means that the euro area, and the wider EU, remain prone to further shocks and the cohesion of the euro area under continued threat," Moody's said in a statement from London on Monday.

More than five times as many stocks declined as advanced on the Toronto stock exchange, led by materials and energy companies. Suncor Energy lost 2.2 per cent.

Yellow Media Inc. sank 7.9 per cent. The publisher of the Yellow Pages phone directories is among the companies that will be removed from the S&P/TSX composite index, Standard & Poor's, the index compiler, said Friday after markets closed.

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About the Author
Investment Reporter

Nicolas Johnson has covered global finance, markets and investing since 1998. He joined The Globe and Mail in 2011. He has worked as a reporter and editor with Bloomberg News in Paris and Tokyo, and also worked briefly in emerging-market debt at Société Générale. More

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