Italy has a new prime minister in former European Commissioner Mario Monti. However, investors remained cautious about the country, forcing Italy to pay a euro-era high rate of 6.29 percent to sell €3 billion worth of five-year bonds on Monday.
Investor nervousness was evident throughout financial markets on Monday. Stocks fell, both the S&P 500 and the STOXX Europe 600 losing 1 percent. The euro weakened 0.9 percent to $1.3628.
The Italian 10-year yield increased 25 basis points to 6.70 percent. Spain's 10-year yield also increased 25 basis points to 6.11 percent, pushing its spread versus German bunds to a euro-era record high.
Weak economic data added to the negative news from Europe. Industrial production in the euro area fell 2.0 percent in September, the biggest decline in 2½ years.
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