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U.S. and global stocks fell Tuesday as investors closed their positions ahead of the New Year and amid concern over political uncertainty in Greece. Greek stocks stabilised after a volatile trading session Monday, after the government was forced to call elections that could bring more economic turmoil. Investors are worried the January 25 elections might be won by the left-wing opposition Syriza party, which rejects Greece’s bailout deal. At one point, the Athens stock market plunged 11% on Monday before recovering some of those losses to close down 4%.
“An election puts all sorts of doubt on the future of the bailout agreement given anti-austerity party Syriza is currently leading the polls,” said Stan Shamu, a market strategist at IG Markets. “Potentially markets had already priced this in, but I would still remain cautious around Greece,” he told the Associated Press.
The Dow Jones industrial average was down 26 points, or 0.2%, to 18,010 in early Tuesday trading. The Standard & Poor’s 500 index lost four points, or 0.2%, to 2,086 and the Nasdaq composite was down six points, or 0.1%, to 4,801.
France’s CAC 40 fell 0.9%, Germany’s DAX dropped 1.2% and the FTSE 100 was down 0.7%. At this point, most major fund managers have closed their portfolios for 2014. Stock trading is expected to be quiet until the week after the New Year, when most of Wall Street is back from the long holiday weekend. Roughly 2.4 bln shares traded on the New York Stock Exchange on Monday, compared with the 3.5 bln typically traded on an average day.
The dollar fell to 119.09 yen from 120.659 yen while the euro rose to $1.2173 from $1.2154. Benchmark U.S. crude was steady at $53.63 per barrel in electronic trading on the New York Mercantile Exchange. On Monday, the contract had plunged $1.12 to settle at $53.61.