Stocks Fall On Spike In Italian Borrowing Costs

• NYSE down 324 (-4.2%) to 7,346.99
• DJIA down 389 (-3.2%) to 11,780.94
• S&P 500 down 46 (-3.7%) to 1,229.10
• Nasdaq down 105 (-3.9%) to 2,621

GLOBAL SENTIMENT

• Nikkei up 1.16%.
• Hang Seng up 1.71%.
• Shanghai Composite up 0.8%.
• FTSE-100 down 1.9%.
• DAX-30 down 2.2%.

Major stock averages tumble over 3% as a surge in Italy's borrowing costs derailed stocks there and around much of the globe. Crude oil ends down over 1% to $95.74 a barrel, falling from three-month highs and snapping a five-day win streak. Also, new data released this morning showed inventories at domestic wholesalers fell last month.

Italian bond yields were in focus after clearing firm LCH.Clearnet raised its margin requirements for Italy's government debt, MarketWatch and other news outlets reported. The 10-year yield spiked above 7%, a level viewed by many strategists as marking an unsustainable level for Italian borrowing costs as it did for Greece and other countries.

Embattled Prime Minister Silvio Berlusconi said on Tuesday he will resign after parliament approves austerity measures.

Borrowing costs surged as Berlusconi's insistence on elections instead of an interim government opened the way to prolonged instability and delays to economic reform, Reuters said.

German Chancellor Angela Merkel issued a call to arms of sorts, the story said.

Merkel said Europe's plight was now so "unpleasant" that deep structural reforms were needed quickly, warning the rest of the world would not wait. "That will mean more Europe, not less Europe," she told a conference in Berlin.

In Greece, Prime Minister George Papandreou resigned as a new coalition government is set to take over the government in that country, led by house speaker Filippos Petsalnikos, Reuters reported.

Also this morni! ng, new data from the Commerce Department indicated that inventories at the wholesale level fell 0.1% last month but were up 11.9% from the previous year, MarketWatch reported. Sales to wholesalers increased 0.5% last month.

Commodities markets followed stocks lower.

Crude fell Wednesday, sliding off a three-month high and snapping a five-day winning streak, as prices ultimately tracked U.S. stocks despite bullish supply news.

Prices had turned around after a weekly government supply report showed surprise, sharp declines in crude and crude products inventories. Fears of lowered demand in the face of struggling U.S. equities, problems in the eurozone, and a higher dollar prevailed.

Crude for December delivery declined $1.10, or 1.1%, to $95.74 a barrel on the New York Mercantile Exchange.

In company news:

ADRs of Total (TOT) fell while Bloomberg reports that the french oil major is in talks with OAO Rosneft about exploration projects, such as the Val Shatskogo venutre in the Black Sea, citing comments from CEO Christophe de Margerie.

Merck & Co (MRK) said its hormonal contraceptive Nexplanon is now available in the United States. The 68 mg contraceptive is an etonogestrel implant approved by the U.S. Food and Drug Administration for the prevention of pregnancy in women for up to three years.

Reuters reported that Goldman Sachs (GS) is seeking to raise up to $1.54 billion by selling 2.4 billion shares in Industrial and Commercial Bank of China Ltd.

Computer memory maker STEC Inc. (STEC) plunged after reporting mixed Q3 results, and a dismal Q4 revenue forecast. STEC reported Q3 profit plunged 65% on lower sales. The numbers still beat expectations, but the company's forecast for Q4 of no more than $57 million fell short of the average analyst estimate of $72.1 million.

DOWNSIDE MOVERS

(-) RBCN downgraded

(-) HBC reports Q3 profit

(-) GM Q3 earnings drop from year-ago levels

(-! ) RL rep orts Q2 results

(-) ROVI Q3 earnings disappoint

(-) STP Q3 revenue seen above expectations

(-) M reports Q3 earnings beat

(-) CEDC downgraded

UPSIDE MOVERS

(+) RAD upgraded

(+) SODA reports improved Q3 results

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