Press Association
Wednesday 23rd May 2012
Stocks have had their worst day of the year after Greece hit a roadblock on its way to a critical bailout.
The Dow Jones industrial average closed down 89.23 points, or 0.7%, at 12,801.23. The broader Standard & Poor's 500 finished down 9.31 points to 1,342.64. It was the first losing week for S&P this year.
Just a day earlier, investors had bought stocks after Greek prime minister Lucas Papademos and the heads of the three parties backing his government agreed to slash wages, lay off civil service workers and cut government spending.
That was seen as a step toward Greece's securing a 130 billion euro international bailout that it must have to avoid defaulting on its debt next month and sending a shock through the world financial system.
European finance ministers insisted Greece agree to deeper cuts in wages and spending. More than 15,000 people swarmed the streets of Athens, some hurling paving stones at police. Four cabinet ministers have resigned over the cuts.
The decline in US stocks was broad, with all 10 industry categories in the S&P 500 down. Materials stocks fell the most, down 1.8%. Energy and financial stocks both fell more than 1%. The Nasdaq composite closed down 23.35 points at 2,903.88.
Since the start of the year, stocks have been generally rising on small daily gains because of good economic news and a sense that the worst of the debt crisis in Europe might be over. The Dow has risen 4.8% in 2012 and seemed poised earlier this week to break 13,000 for the first time since 2008.
At its low point on Friday, the Dow was down 145 points. Its largest intraday loss so far this year was 159 points, on January 13, but the Dow has not closed down more than 100 points since December 28.
Aluminium producer Alcoa dropped 3.3%, the biggest fall among the 30 stocks in the Dow.
On the New York Stock Exchange, three stocks fell for every one that rose. Volume was light with just 3.5 billion shares trading hands.
