WALL Street ended lower yesterday as fears ahead of the weekend elections in Greece finally drove down a market that had been treading water through most of the day.
Up to €800m has been pulled out of Greek banks daily ahead of the cliffhanger election on Sunday, which many fear will result in Greece leaving the Eurozone.
If that happens, investors fear other peripheral nations may also have to exit.
The Eurozone’s cloudy future has made investors inclined to quickly reverse positions. Yesterday they pounded shares in financial, energy and materials sectors into the close.
Volume surged after three weak sessions. About 7.1bn shares traded on the NYSE, Amex and Nasdaq, slightly above the 20-day moving average.
There’s a “lack of details or specifics coming out of Europe, and that creates more of a vicious cycle,” said Larry Peruzzi, senior equity trader at Cabrera Capital Markets in Boston. “The euro has been a concern every single day.”
Also weighing on sentiment, the government reported US retail sales fell in May to their worst level in two years, the latest data to point to sluggish US growth after a weaker-than-expected US jobs report in May sparked widespread fears of a slowdown. The S&P Retail Index lost 1.5 per cent.
There was a defensive tilt to trading for much of the day as gains in sectors such as healthcare and telecoms managed for a time to offset declines in cyclical areas.
Shares in telecom provider AT&T hit a 52-week high at $35.06, before closing unchanged at $34.98. The telecom sector ticked up 0.1 per cent.
Shares of JPMorgan Chase were a standout, rising 1.6 per cent as the bank’s chief executive, Jamie Dimon, defended the portfolio behind JPMorgan's recent multibillion-dollar trading loss, telling lawmakers it was a genuine hedge that would make the firm a lot of money if a credit crisis hit.
In the overall market, the Dow Jones industrial average fell 77.42 points, or 0.62 per cent, at 12,496.38. The Standard & Poor’s 500 Index lost 9.30 points, or 0.70 per cent, at 1,314.88. The Nasdaq Composite Index dropped 24.46 points, or 0.86 per cent, at 2,818.61.
In company news, Dell, the No 2 US PC maker, said it aims to raise its target on dividends and share buybacks to 20 to 35 per cent of free cash flow, saying its corporate software and services business is on track to grow by an average of 10 per cent annually until 2016. Its shares advanced 2.5 per cent to $12.27.
Shares of Celgene rose 0.8 per cent to $63.59 after the biotech company authorised a stock buyback programme of $2.5bn.