Market Snapshot
Dow drops as Spain fears limit Greek relief
NEW YORK (MarketWatch) -- U.S. stocks on Monday ended with losses for the Dow industrials but a third straight rise for the S&P 500, as Spanish bond yields hit a euro-era high, countering cheer that came with the results of Greek elections.
"Everyone is looking for a silver bullet, and there is no such thing," said Paul Nolte, managing director of Dearborn Partners in Chicago, of Europe's continuing effort to contain its debt crisis.
The euro fell against other currencies including the dollar (EURUSD) as enthusiasm over the victory for pro-austerity parties in Greece faded amid worries about what's still ahead for the euro area.Read more on currencies.
"I'm not sure this election has solved anything. But from an investors' perspective, it's good the Greek people were not against being in the euro," said Nolte. Read more market reaction to Greece.
"There is so much noncompany specific data that investors are not quite sure where to turn," he added.
After falling 71 points and rising more than 14 points, the Dow Jones Industrial Average
(DJIA)
ended down 25.35 points, or 0.2%, to 12,741.82.
The S&P 500 Index (SPX) rose 1.94 points, or 0.1%, to 1,344.78. Gains among the 10 index sectors were led by consumer discretionary, particularly home builders and restaurant stocks, and technology. Energy fell 0.8%, one of two sectors to end lower.
The Nasdaq Composite (COMP) rose 22.53 points, or 0.8%, to 2,895.33, also its third straight rise.
Nasdaq component
Volume was light. For every two stocks sliding three gained on the New York Stock Exchange, where nearly 707 million shares traded hands. NYSE composite volume was 3.1 billion, or about 80% of the past month's average.
No relief?
Data showing that bad loans among Spanish banks climbed to their highest in more than a decade helped dent any euphoria that came with Greek election results.
"The market has moved beyond Greece to Spain, which has both a government debt issue and a banking loan problem that is crippling its efforts to tap the capital markets at a reasonable rate," wrote Kevin Giddis, head of fixed-income capital markets at Raymond James Morgan Keegan, in emailed research.
The yield on Spain's 10-year Treasury note rose 30 basis points to 7.14% (10YR_ESP) , topping the 7% level considered unsustainable for that government's borrowing costs for the first time. Read about yield on Spain's 10-year note shooting to a euro-era high.
"That's the magic line. And the fact that it continues to rise is a concern," said Nolte.
The National Association of Home Builders/Wells Fargo housing index rose to 29 in June from May's slightly revised figure of 28. The latest reading is the highest since May 2007, although it's well below the break-even level of 50, "last seen in the 'bubblicious' days of '06," noted Peter Boockvar, equity strategist at Miller Tabak. Read more about improved sentiment.
On Tuesday, the Federal Open Market Committee starts a two-day policy meeting, with Wall Street largely focused on whether the Fed's program of selling short-term securities while buying longer-dated ones would be extended when it expires at the end of the month. Read more on what's expected from Fed.
Investors were also watching for any developments from a Group of 20 summit of world leaders in Mexico, where President Barack Obama was scheduled to hold talks with German Chancellor Angela Merkel.
Merkel and other euro-zone leaders will also hold further discussions with Obama during the evening at the U.S. president's request. Read more on G-20.
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