Tags: markets | hit | greece | worries

Stocks Take Late Hit on Renewed Greece Worries

Tuesday, 22 May 2012 05:04 PM

U.S. equities faltered minutes before the close on Tuesday and the euro fell as hopes European leaders will tackle the region's debt crisis ebbed, fanning doubts that much would come of a meeting just a day away.

European shares earlier gained almost 2 percent on optimism European leaders may devise new measures to foster growth in the euro zone and restore a doubtful market's confidence.

An informal summit of European Union leaders late on Wednesday is expected to discuss the idea of regional bonds jointly underwritten by all euro zone member states.

However, Germany's long-standing opposition is unlikely to change; the country has dismissed the French-led call for the euro zone to issue common bonds.

U.S. stocks ended the day mostly flat after retreating from gains of about 1 percent, pulled lower by a news report that some traders took as a sign that the risk of Greece crashing out of the eurozone was growing.

Dow Jones quoted former Prime Minister Lucas Papademos of Greece as saying that Greeks had no choice but to stick with a painful austerity program or face a damaging exit from the euro zone, a risk he said was unlikely to materialize but was real.

The report weighed on a dose of pessimism in the market.

"The string of summit meetings that have been called to address the euro crisis thus far have more often than not failed to live up to market hopes for quick and decisive action and this one will be no exception," said Shaun Osborne, chief currency strategist at TD Securities in Toronto.

A rise in sales of existing U.S. homes to their highest annual rate in nearly two years in April and a decline in foreclosures that pushed housing prices higher added to a positive tone.

The National Association of Realtors said existing home sales increased 3.4 percent to the highest annual rate since May 2010, while the median price nationwide jumped to $177,400, up 10.1 percent from a year earlier.

The Dow Jones Industrial Average closed down 1.67 points, or 0.01 percent, at 12,502.81. The Standard & Poor's 500 Index rose 0.64 points, or 0.05 percent, at 1,316.63. The Nasdaq Composite Index fell 8.13 points, or 0.29 percent, at 2,839.08.

Banking shares rose, with JPMorgan Chase & Co , Citigroup Inc, Bank of America and Wells Fargo Corp, the top four contributors to the S&P 500's gains. The KBW banking index rose 1.1 percent.

Another 8.9 percent downdraft in Facebook Inc pressured tech shares. Shares are now 18.4 percent off their initial public offering price after three days of trading.

The FTSE Eurofirst index of top European shares rose 1.9 percent to close at 993.67, extending a recovery from five-month lows hit on Monday.

MSCI's all-country global equity index was up 0.8 percent to 303.65.

The euro fell amid skepticism Wednesday's talks would yield much progress. The euro was down 1.0 percent against the dollar at $1.2681. The dollar index rose 0.7 percent to 81.679 , rising after three days of losses.

The dollar was boosted in part by a fall in the yen after Fitch ratings agency downgraded Japan on worries about its high level of public debt.

"Tomorrow's meeting will not deliver any landmark solution. The market is likely to be more prone to disappointment," said Matteo Regesta, a strategist at BNP Paribas.

"There's this delusion of a quick fix either via monetary policy with the European Central Bank or via some kind of fiscal decision, but unfortunately this won't happen," Regesta said.

U.S. Treasurys prices fell as investors took profits from recent gains, while continuing uncertainty in Europe kept many fund managers on the sidelines.

The benchmark 10-year U.S. Treasury note was down 10/32 in price to yield 1.78 percent.

 

Oil prices fell as signs of a deal between the U.N. nuclear watchdog and Iran on Tehran's nuclear program eased fears of oil supply disruptions, while the euro zone debt crisis continued to threaten economic growth.

Brent July crude slipped 40 cents to settle at $108.41 a barrel.

The expiring U.S. June crude contract fell 91 cents to settle at $91.66 a barrel, while U.S. crude for July delivery fell $1.01 to settle at $91.85.

"There is perception that the Iranians are more agreeable at this point to slowing down their nuclear efforts, but they still have to show some concrete action regarding their nuclear program to justify such hopes," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

U.S. gold futures for June delivery settled 0.76 percent lower at $1,576.6 an ounce.

The Reuters/Jefferies CRB Index was down 1.1 percent at 286.50.

© 2017 Thomson/Reuters. All rights reserved.

   
1Like our page
2Share
768
2012-04-22
Tuesday, 22 May 2012 05:04 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved