NEW YORK-US stocks closed lower as worries about Greece rattle financial markets. The Dow Jones industrial average dropped 125 points to close at 12,695, a loss of one per cent. Political parties in Athens resumed negotiations to form a government yesterday. The uncertainty has raised concerns that if Greece leaves the currency union, bond traders may demand steeper borrowing rates from other troubled countries. The Standard & Poor's 500 index dropped 15 points to 1,338. The Nasdaq sank 31 points to 2,903. Treasury yields hit their lowest levels of the year as investors dumped riskier assets, and the euro sank to a three-month low against the dollar.
Five stocks fell for every one that rose on the New York Stock Exchange. Trading volume was 3.6 billion, lower than the recent average. World stock markets dropped sharply yesterday as worries intensified over the condition of the eurozone and whether Greece is edging towards exiting the single currency union. In Athens, Greek party leaders struggled for a ninth day to form a coalition government. As the political wrangling dragged on, markets contemplated the threat that the crisis-stricken country would not meet the terms of its bailout and drop out of the currency club. Europe stocks tumbled to four-month lows. Britain's FTSE 100 fell two per cent to 5,465.52 and Germany's DAX tumbled 1.9 per cent to 6,451.97. France's CAC-40 lost 2.13 per cent to 3,057.99. The euro fell to US$1.2839 from US$1.2925 late Friday. Wall Street followed, with the Dow Jones industrial average down 0.8 per cent, or 104 points, to 12,716 and the S&P 500 losing 12 points to 1,341. Shares in JPMorgan Chase were down two per cent after its chief investment officer resigned in the wake of a US$2 billion trading debacle.
Taking the hardest hits were the Athens Stock Exchange, which saw shares drop 4.4 per cent, and Spain's Ibex, which fell 3.1 per cent on continuing concerns that the country's crippled economy would not be able to keep a handle on its borrowing costs.
Asian stocks also endured losses, although one notable exception was Japan, where the benchmark Nikkei 225 index rose 0.2 per cent to close at 8,973.84. Benchmark oil for June delivery was down US$1.72 to US$94.42 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 95 cents to settle at US$96.13 in New York on Friday. In currencies, the dollar sank to 79.81 yen from 79.90 yen late Friday in New York. (AP)