US stocks pare early losses, Italian worries likely to cap meaningful up-move

Major US equity indices opened lower for the third straight session on Monday and continued to be weighed down by the recent upsurge in the US Treasury bond yields.

With most banks and federal agencies closed in observance of Columbus Day, trading volumes are expected to remain low, though fears about rapidly rising interest rates might continue to dampen investors’ appetite for perceived riskier assets – like equities.  

Investors also tracked the latest developments in Europe, where the Italian government’s budget plans were seen as setting up a potential market-disrupting clash with the EU and trigger a new chapter in the Euro-zone’s long-running debt crisis.

Further downside, however, remained cushioned amid expectations for strong corporate results in coming days. All the three major indices pared opening losses, with the blue-chip Dow Jones Industrial Average now trading lower by only 20-points near 26,430.  
Meanwhile, the broader &SP 500 Index treaded water near Friday’s closing level, around the 2,885 region, and tech-heavy Nasdaq Composite was down over 7-points to 7,780.