Stocks fall; Greek deal hope fades

Los Angeles Times - - BUSINESS BEAT -

Stocks dropped Wed­nes­day, eras­ing all of the week’s ear­lier gains, as ne­go­ti­a­tions be­tween Greece and its cred­i­tors seemed no closer to reach­ing a res­o­lu­tion.

The Dow Jones in­dus­trial av­er­age lost 178 points, or 1%, to 17,966.07. The Stan­dard & Poor’s 500 in­dex lost 15.62 points, or 0.7%, to 2,108.58 and the Nas­daq com­pos­ite lost 37.68 points, or 0.7%, to 5,122.41.

In­vestors had been hope­ful ear­lier in the week that the Greece prob­lem was reach­ing the f in­ish line, but those hopes di­min­ished as Wed­nes­day wore on. Euro­pean f inance min­is­ters cut short a meet­ing on Greece’s pro­pos­als, cit­ing ma­jor pol­icy dif­fer­ences. They plan to meet again Thurs­day. Greek stocks fell 2%.

Prime Min­is­ter Alexis Tsipras crit­i­cized the In­ter­na­tional Mon­e­tary Fund as be­ing need­lessly picky about the re­forms Greece had pro­posed.

Cred­i­tors are de­mand­ing, among other things, a freeze on pen­sions, scrap­ping some pro­posed taxes and sur­charges on busi­ness, and higher sales tax on some goods.

Greece needs an agree­ment by June 30, when a key debt pay­ment is due to the IMF. In a worst- case sce­nario, a Greek de­fault could po­ten­tially lead to Greece aban­don­ing the euro.

“Greece has to be the slow­est- mov­ing train wreck in f inan­cial history. But in a way it’s a good thing, be­cause if Greece had failed in 2012 we’d be in a much more dire sit­u­a­tion,” said Jack Ablin, chief in­vest­ment of­fi­cer at BMO Pri­vate Bank, which over­sees $ 66 bil­lion in Chicago.

In­vestors also re­main fo­cused on when the Fed­eral Re­serve might in­crease its key in­ter­est rate for the first time in nearly a decade. Fed Gov. Jerome Pow­ell said Tues­day that he ex­pects the U. S. cen­tral bank to be­gin rais­ing its bench­mark in­ter­est rate in Septem­ber, with a sec­ond rate rise com­ing in De­cem­ber.

U. S. gov­ern­ment bond prices rose. The yield on the 10- year Trea­sury note fell to 2.37% from 2.40% late Tues­day.

Among in­di­vid­ual stocks, Sysco rose $ 1.16, or 3%, to $ 38.75 af­ter a fed­eral judge ruled that the food dis­tri­bu­tion com­pany could not merge with ri­val US Foods. The Fed­eral Trade Com­mis­sion had sued to block the deal in Fe­bru­ary.

Lennar rose $ 2.06, or 4%, to $ 51.06 af­ter the home builder re­ported re­sults that beat an­a­lysts’ ex­pec­ta­tions. Other home builders such as Pulte, D. R. Hor­ton and Toll Bros. also rose.

Bench­mark U. S. crude fell 74 cents to close at $ 60.27 a bar­rel on the New York Mer­can­tile Ex­change. Brent crude, a bench­mark for in­ter­na­tional oils used by many U. S. re­finer­ies, fell 96 cents to close at $ 63.49 a bar­rel in Lon­don.

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