NEW YORK--US stocks fell, following a two- week rally, amid concern about a worsening of Europe’s debt crisis as Spanish bond yields climbed to a euro-era record.
Morgan Stanley and Bank of America. retreated at least 1.1% to pace declines in financial companies. Anadarko Petroleum Corp and Baker Hughes Inc lost more than 1.1% as oil slumped amid a stronger U.S. dollar against the euro.
The Standard & Poor’s 500 Index lost 0.2 percent to 1,340.44 as of 9:44 a.m. in New York. The Dow Jones Industrial Average declined 30.80 points, or 0.2%, to 12,736.37.
“Spain is the issue to worry about, not Greece,” said Michael Strauss, who helps oversee about $26 billion of assets as the chief investment strategist at Commonfund in Wilton, Connecticut. “Their debt issues are the real debt issues. Greece is the sideshow. We’re going to have some indigestion.”
Equities dropped as Spain’s 10-year bond yields rose above 7 percent, sparking concern that the nation will need external funding. Stock futures rose earlier today as an election win by Greece’s biggest pro-bailout party eased expectations about an imminent exit from the euro.
Concern about Europe crisis crisis put the S&P 500 on the brink of a so-called correction this month. It fell 9.9 percent from an almost four-year high in April through June 1. Since then, the lowest valuation in six months and bets on global policy action drove the measure up 5.1 percent through last week.
“The results of the Greek election took a negative off the table versus this being a big positive,” said Todd Lowenstein, who helps oversee about $17 billion for Highmark Capital Management Inc. in Los Angeles. “There are still structural issues and imbalances that need to be dealt with.” (Bloomberg/tw)