BLBG:U.S. Stocks Retreat With Euro As Treasuries Trim Drop
U.S. stocks erased gains and the euro extended losses versus the dollar, while Treasuries trimmed earlier declines, on concern that Greece was making preparations to exit the euro. Facebook Inc. (FB) tumbled 8.9 percent.
The Standard & Poor’s 500 Index closed up less than 0.1 percent at 1,316.67 at 4 p.m. in New York after rallying as much as 1 percent. The euro slid 1.1 percent to $1.2682 and 10-year Treasury yields increased three basis points to 1.77 percent after surging as much as six points earlier. Crops led commodities lower while oil retreated as Iran agreed to let Western nuclear inspectors into the country.
U.S. equities reversed gains and the euro sank to its low of the day after Dow Jones reported that former Greek Prime Minister Lucas Papademos said the nation is considering preparations to leave the shared currency. The comments wiped out an earlier rally in stocks triggered by an increase in U.S. home sales and speculation leaders in Europe and China will step up efforts to bolster economic growth.
“We went from risk-on to risk-off pretty quickly,” Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co., said in a telephone interview. “Greece is not a major economy, but there’s obviously fear of contagion in case it exits the euro. These outside factors will weigh on the market even as economic numbers are good.”
U.S. shares rallied earlier after the National Association of Realtors said sales of existing homes increased in April for the first time in three months, adding to signs the housing market is recovering. China plans to speed up approval of infrastructure projects and allocate construction funding faster to improve growth, the China Securities Journal reported.
The S&P 500 surged 1.6 percent yesterday, the biggest gain since March 13, after German Finance Minister Wolfgang Schaeuble said yesterday that European leaders will do “everything necessary” to keep Greece in the 17-nation euro and focus on steps to aid economic expansion.
To contact the reporters on this story: Michael P. Regan in New York at mregan12@bloomberg.net; Rita Nazareth in New York at rnazareth@bloomberg.net
To contact the editor responsible for this story: Chris Nagi at chrisnagi@bloomberg.net
