Quantcast
Get breaking news alerts via email

Click here to manage your alerts
(Seth Wenig | The Associated Press) Traders work on the floor at the New York Stock Exchange in New York on Tuesday. Stocks suffered their biggest losses of the year Tuesday as a sell-off spread west from Europe ahead of a critical deadline in the Greek debt crisis.
Dow falls more than 200, cooling 2012 rally

Stocks » Index hadn’t dropped 100 points in 45 straight days, the longest streak since 2006.

First Published Mar 06 2012 07:06 am • Last Updated Jun 25 2012 11:33 pm

Stocks suffered their biggest losses in three months Tuesday, the first hiccup in a strong and steady rally to start the year. Wall Street worried about the global economy and waited while Greece pressured the last investors to sign on for its bailout.

The Dow Jones industrial average fell more than 200 points, giving up more than a quarter of its 745-point advance since Jan. 1, the best start to a year in the U.S. market since 1998.

Join the Discussion
Post a Comment

The sell-off, which spread west from Europe, also interrupted a period of unusual calm on Wall Street. Before Tuesday, the Dow had not fallen 100 points for 45 straight trading sessions, the longest streak since 2006.

The decline of 203.66 points was the worst for the Dow since Nov. 23 and left the average at 12,759.15. It was only last week that the Dow closed above 13,000 for the first time since May 2008, four months before the worst of the financial crisis.

"When things go straight up and don’t ever correct or have some sort of normal pullback, as an investor, that makes me nervous," said Ed Hyland, a global investment specialist with J.P. Morgan Private Bank.

The gradual rally had been powered by optimism about the U.S. economic recovery. But investors realized that Greece’s debt problems, Europe’s economic problems and Israel’s Iran problems were still very much their problems, too.

Stocks fell sharply from the opening bell and never mounted a serious comeback. The Dow was down as much as 227 points. All but one of the 30 stocks in the average finished the day lower. Intel managed a gain of 7 cents.

All 10 industry groups in the Standard & Poor’s 500 declined. Bank stocks, which typically take a hit when there is any reason to worry about Greece, led the declines, followed by industrial and materials companies, which depend on strength in the world economy.

Alcoa, which makes aluminum and depends heavily on world economic demand, fell 4.1 percent, the worst of the Dow 30. China revised its projection for economic growth on Monday to 7.5 percent this year, down from 8 percent.

The Standard & Poor’s 500 index fell 20.97 points, its worst decline since Dec. 8, to 1,343.36. The S&P had not declined 1 percent or more for 45 straight trading days, also the longest streak since 2006. That year, the S&P put together 94 in a row.


story continues below
story continues below

The Nasdaq composite index dropped 40.16 points to 2,910.32. The Nasdaq last week broke through 3,000 for the first time since December 2000, during the collapse in dot-com stocks.

Last year, sell-offs like this were much more common. The S&P fell by at least 1 percent on 48 trading days, roughly one in every five. During the depths of the financial crisis in the last four months of 2008, it happened roughly one in every three days.

Stocks fell more than 3 percent Tuesday in Germany, Spain and France, and 1.9 percent in Britain. Greece stepped up pressure on private investors to swap their Greek government bonds for replacements with a lower face value and interest rate.

Major banks and investment funds have signed on for the swap, but it remains unclear whether hedge funds, which had already bought the bonds at a steep discount and may profit from bond insurance payouts if Greece defaults, will agree. The deadline is Thursday.

The swap is vital for Greece to cut its debt and get a bailout of (euro) 130 billion, or $172 billion, from other countries and the International Monetary Fund. Without the bailout, Greece could default on its debt later this month and rattle markets around the world.

Bill Stone, chief investment strategist for PNC Wealth Management, called Tuesday’s decline "fairly rational," considering how much the market has climbed and the economic worries in Greece and the rest of Europe.

"You need the pullback to give people opportunities to want to get involved again," Stone said.

The price of oil slipped $2.02 to $104.70 per barrel on the New York Mercantile Exchange. New York crude has risen from $96 last month amid fears of a disruption in global oil supplies driven by the potential for military conflict with Iran.

President Barack Obama said diplomacy can still resolve the crisis over Iran’s possible pursuit of nuclear weapons and accused his Republican critics of "beating the drums of war." Iran dominated Obama’s first news conference of the year.

The price of gold fell $31.80 per ounce, or 2.1 percent, to $1,672.10 per ounce. Silver, platinum and copper all fell more than 2 percent because of concerns about Europe and weaker economic demand in China.

"Global growth fears now are hitting home, and we’re seeing selling across the board," said Matt Zeman, a market analyst for Kingsview Financial.

Next Page >


Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Login to the Electronic Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.