U.S. stocks derailed by European concerns
NEW YORK (MarketWatch) -- U.S. stocks declined Monday, denting June gains with four sessions in the month remaining, as pessimism rose about the outcome of a meeting of European leaders this week.
"Unfortunately as we vacillate between cynicism and optimism about European leaders getting anything done, cynicism seems to be ruling the day," said Art Hogan, market strategist at Lazard Capital Markets.
Cyprus said it would ask for financial aid, and Greece's finance minister reportedly resigned his position Monday, just four days after being named to the job and three days after being hospitalized for nausea and dizziness. And Greek Prime Minister Antonis Samaras will miss the coming European Union summit as he recuperates from eye surgery.Read more on Cyprus.
"Once again front and center is Europe. So far, again there is a lot of politics, with a fairly wide crevice between what Germany is willing to do versus what others are calling for," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in San Francisco.
And, Spain formally asked for help for its banking system, but the request left unclear how much of the $125 billion loan packaged by other European nations was actually needed.
The S&P 500 (SPX) lost 21.30 points, or 1.6%, to 1,313.72, with technology hit the hardest among its 10 sectors.
The session marked the third down day in four for both indexes.
The Nasdaq Composite (COMP) shed 56.26 points, or 2%, to 2,836.16.
For every stock rising more than three fell on the New York Stock Exchange, where nearly 754 million shares traded. Composite volume was 3.4 billion.
The Commerce Department reported new-home sales climbed to a two-year high in May. Read more about the housing data.
"Housing is a sign of strength here on the domestic front, which is something that should not be lost on investors, although domestic news will unfortunately probably be trumped by Europe," said Luschini.
A Supreme Court ruling on 2010's Affordable Care Act is now expected Thursday.
"Any of the credible outcomes will be market moving.If it's upheld, it removes the overhang of the unknown, and a lot of health-care companies will probably celebrate that," said Lazard's Hogan.
"If it's struck down, then the overall market probably celebrates because it's a lean in the direction of less regulation, although not great for health-care companies and service providers. If the individual mandate is dropped and the rest kept, again the hospital and insurance companies would lose," he said.
"It could be a big deal, predicated on which way it breaks. I don't know that if the Supreme Court comes down on the side of its legality [that] is going to put the market off, but I do think its repeal could be a boost to equities," said Luschini, who explains the former would be continuing the status quo, while the latter would be seen as "some relief on the regulatory front."
Another market observer predicted that health-care stocks could get a boost from the ruling regardless of what the justices decide.