U.S. stocks slide before Greek elections
NEW YORK (MarketWatch) -- U.S. stocks fell Wednesday with investors on guard ahead of Greek elections Sunday and after Egan-Jones Ratings Co. downgraded its sovereign rating on Spain further into junk.
"Whether we like it or not, there is going to be an election in Greece. That is most likely going to be a binary event; after Sunday we'll know whether or not Greece remains in the euro zone," said Art Hogan, market strategist at Lazard Capital Markets LLC in New York.
"There's a huge chance that we know more about Greece next week than we did last week, but very little chance that we know more about Spain, which is more of a concern for us in real terms. Spain is like California, Greece is like Tennessee," added Hogan of the different sizes of their respective economies.
Reports of increasing withdrawals at Greek banks also intensified market worries.
"The Greek people are entering one of the most frightening weekends of their already economically troubled lives with the possibility of their lifetime savings (or what's left for many) getting cut in half with a devalued drachma. Sadly for them, there will be many sleeping with cash under the mattress and extra food in the fridge this weekend," emailed Peter Boockvar, equity strategist at Miller Tabak.
The Dow Jones Industrial Average
fell 77.42 points, or 0.6%, to 12,496.38, with
"Obviously Jamie Dimon is not the single largest driver of the market, but clearly he's the dominant conversation. In front of the Greek elections Sunday, today's testimony provides a welcome diversion," said Dan Greenhaus, chief global strategist at BTIG LLC, ahead of the late afternoon selloff.
The S&P 500 Index (SPX) lost 9.30 points, or 0.7%, to 1,314.88, with consumer discretionary hardest hit among its 10 major sectors.
The Nasdaq Composite (COMP) shed 24.46 points, or 0.9%, to 2,818.61.
For every stock rising more than two fell on the New York Stock Exchange, where a paltry 707 million shares. Composite volume neared 3.4 billion.
The Commerce Department reported retail sales fell 0.2% in May, in line with the prior month's revised percentage drop, which was first reported as a gain. Read more on retail sales.
"Retail sales were a problem and raises the downside risk" for U.S. second-quarter gross domestic product, said Greenhaus at BTIG
On Tuesday, U.S. equities rallied on speculation about central bank moves to bolster the economy ahead of the Federal Open Market Committee's policy-setting meeting next week.