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New York - US stocks fell sharply on Monday as renewed fears of a Greek debt default
prompted investors to book some of last week’s gains and turn to toward the
safety of US government debt.
Energy and financial stocks were the day’s top decliners. The
S&P energy sector index was off 3.1% as oil prices tumbled. The
financial sector index lost 2.6% following a steep decline in European
banks on worries euro zone leaders won’t be able to prevent a default by
debt-stricken Greece.
“The market really fought back last week despite the sovereign debt
concerns, weakening euro and the Greek default fears because everyone was sort
of expecting the policy makers to come up with something over the weekend,” said
Larry Peruzzi, senior equity trader at Cabrera Capital Markets in Boston.
“We saw none of that. They had their meetings, but nothing came out
of them, disappointing the investors and triggering the sell-off.”
The Dow Jones industrial average was down 2.01%, Standard & Poor’s 500 Index was down 2.11% and the Nasdaq Composite Index was down 2.10 percent%.
The US 30-year Treasury bond rose two points in price.
At meetings on Saturday, European Union finance ministers broke no
new ground in dealing with the crisis and made no decision on whether to give
more firepower to the 440 billion euro ($607 billion) bailout fund, as suggested
by US Treasury Secretary Timothy Geithner.
Investors bought government debt after the Greek prime minister,
George Papandreou, canceled a visit to the United States to instead chair a
cabinet meeting on Sunday, a day before EU and International Monetary Fund
inspectors hold a conference call with Finance Minister Evangelos Venizelos to
hear how Greece will plug this year’s budget shortfall.
A regional election defeat for German Chancellor Angela Merkel on
Sunday, her sixth election defeat this year, also kept investors on edge.
In the United States, homebuilder sentiment dipped in September,
with an industry index mired in a low range as the housing market continues to
struggle, the National Association of Home Builders said. Market reaction was
muted.
US-listed shares of a Swiss bank UBS fell 4.1% to $11.39
as the bank began an internal investigation into the catastrophic failure of its
risk systems after rogue equity trades cost UBS $2.3bn, raising the
pressure on top management.
Netflix Inc shares rose 2.5% to $158.78 after it said it
would separate its movie streaming business and its DVD-by-mail service, which
will be called Qwikster.
US stocks rose for a fifth day in a row on Friday and the S&P
500 index scored its best week since early July.
