Stocks drop af­ter Greece set­back

Los Angeles Times - - HIGHWAY 1 -

A set­back in talks be­tween Greece and its cred­i­tors helped knock the stock mar­ket lower Fri­day amid re­newed con­cerns that the coun­try could de­fault on its debts.

De­spite the drop, the Stan­dard & Poor’s 500 in­dex man­aged to eke out a 1-point gain for the week, snap­ping a two-week slump.

An un­ex­pected de­ci­sion by the In­ter­na­tional Mon­e­tary Fund to walk away from talks with Greece spurred the sell­ing. At a sum­mit meet­ing in Brussels late Thurs­day, the IMF pulled its ne­go­tia­tors out of talks with Greece, say­ing there had been no progress and that ma­jor dif­fer­ences re­mained on key is­sues.

With­out a deal by the end of the month, Greece faces the prospect of fil­ing for bank­ruptcy and drop­ping the euro cur­rency.

Mar­kets are likely to make sud­den turns un­til Greece and its cred­i­tors reach a deal, said Ninh Chung, head of in­vest­ment strat­egy at SVB As­set Man­age­ment.

Ear­lier this week, stocks on both sides of the At­lantic ral­lied on re­ports of progress in the talks.

“There had been op­ti­mism over Greece,” Chung said, “and now it seems like we’ve had a com­plete 180.”

The S&P 500 slipped 14.75 points, or 0.7%, to close at 2,094.11. The Dow Jones industrial av­er­age fell 140.53 points, or 0.8%, to 17,898.84 and the Nas­daq com­pos­ite lost 31.41 points, or 0.6%, to 5,051.10.

The losses were mod­est but broad: All 30 com­pa­nies in the Dow and all 10 in­dus­tries in the S&P 500 fin­ished with losses.

Ma­jor in­dexes in Europe slumped, wip­ing out gains from ear­lier in the week. Greece’s mar­ket fell the most, with the main Athens in­dex down 6%. Ger­many’s DAX sank 1.2% and the CAC-40 in France fin­ished with a loss of 1.4%. Bri­tain’s FTSE 100 lost 1%.

In Asia, Ja­pan’s Nikkei 225 inched up 0.1%. In China, the Shang­hai com­pos­ite in­dex ad­vanced 0.9% and Hong Kong’s Hang Seng rose 1.4%.

Gov­ern­ment bond prices wa­vered, fin­ish­ing the day slightly lower. The yield on the10-year Trea­sury inched up to 2.39% from 2.38% on Thurs­day.

In met­als trad­ing, gold fell $1.20 to set­tle at $1,179.20 an ounce.

Oil fell for a sec­ond straight day af­ter reach­ing a high for the year Wed­nes­day. Bench­mark crude oil sank 81 cents to set­tle at $59.96 a bar­rel.

In other trad­ing on the New York Mer­can­tile Ex­change, whole­sale gaso­line fell 1.7 cents to $2.121 a gal­lon and nat­u­ral gas dropped 7.5 cents to $2.75 per 1,000 cu­bic feet.

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