Dow Ends Lower After Greece Downgrade
The Dow ended lower Monday, giving up earlier gains, as the euro retreated after Moody's downgraded its debt rating on Greece to junk status.
Stocks had been rallying for most of the day, led by techs and industrials, as strong euro-zone industrial data buoyed hopes for the global economic recovery.
The Dow Jones Industrial Average lost about 20 points, or 0.2 percent, after being up as much as 100 points earlier.
Materials and financials were the biggest decliners, with JPMorgan , DuPont and Bank of America leading Dow decliners.
Utilities and consumer staples were the day's best performers.
The S&P 500also finished lower, while the Nasdaq ended slightly higher. The CBOE volatility index, widely considered the best gauge of fear in the market, was around 28 at the closing bell.
Moody's downgraded its debt rating on Greece by four notches, putting it in junk territory.
Peter Boockvar, equity strategist at Miller, Tabak and Co. in New York, called the move by Moody's "well behind the curve."
"The citizens [of Greece] have yet to embrace the idea of scaling back," Todd Schoenberger, managing director of LandColt Trading, explained.
Earlier, stocks rallied following news that showed euro-zone industrial output in April surged year-on-yearmore than in any month in almost two decades, bolstering the view that economic recovery could be gathering pace.
The euro retreated as the Greek downgrade curbed an earlier burst of short-covering.
Oil rose more than $1, settling at $75.12 a barrel. Gold fell more than $5, settling at $1,223.30 an ounce.
Home Depot shares fell slightly despite Citigroup raising its view on the home improvement retailer. Citi said Home Depot's earnings should improve due to improved expense leverage, share repurchases and higher margins.
BP shares tumbled more than 9 percent following news that the cost to clean up the oil spill in the Gulf of Mexico has spiraled to nearly $1.6 billion and amid worries about the company's dividend.
Halliburton and Transocean were also lower.
BP executives are expected to meet with President Barack Obama on Wednesday. The president is pushing a plan to legally compel the firm to create an escrow accountto compensate businesses and individuals for their losses from the oil spill in the Gulf of Mexico.
Miners were in the spotlight after the US discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials quoted by the New York Times.
But traders cautioned that the discovery doesn't make for an immediate investing opportunity — it might take a while.
"It's the kind of thing that can have an impact on psychology today," said Dennis Gartman, who manages a hedge fund and edits the daily Gartman Letter. "But it's a mining project. That's 10 years in the future."
Plus, there's also a lot of uncertainty surrounding the Afghan government, with the tug-of-war between Hamid Karzai and the Taliban. And, there are the usual uncertainties with the development of natural resources in other countries.
Techs ended mixed after a couple of downgrades in the tech sector: Citigroup cut its price target on Google to $630 from $640 and Credit Suisse cut its price target on Qualcomm to $40 from $45.
Still, Schoenberger said he's "very bullish" on the tech sector, saying the upcoming corporate refresh will help boost the sector.
SanDisk shares jumped after one analyst suggested the stock could get a boost from rising demand for flash memory.
AT&T ended lower after the telecom giant said hackers were to blame for the release last week of email addresses for users of Apple's iPad.
Meanwhile, shares of most airlines rose after Deutsche Bank initiated coverage of the U.S. airline sector with a "favorable view," saying the stocks "benefit disproportionately from an improving economy due to their significant operating leverage."
Coca-Cola shares fell after CFO Gary Fayard said the beverage giant plans to continue to do acquisitions, even as it integrates the North American operations of bottler Coca-Cola Enterprises .
In deal news, Cablevision Systems confirmed its $1.37 billion purchase of Bresnan Communications, an independent operator in the Rocky Mountain region. The fifth-largest cable operator also said it plans a share buyback worth up to $500 million.
And fertilizer maker Mosaic is in talks to buy Mexico's Grupo Fertinal in a deal that could be worth as much as $1 billion, the Wall Street Journal reported.
On the IPO front, the Agricultural Bank of China is seeking to raise more than $23 trillion through a dual Hong Kong and Shanghai listing, putting it on course to be the world's biggest IPO.
Volume was light, with about 1.1 billion shares changing hands on the New York Stock Exchange. Advancers just barely edged past decliners, about 3 to 2.
MONDAY: SEC's Schapiro speaks; Box office futures decision expected
TUESDAY: Fed's Bullard speaks; Empire State survey; import & export prices; credit card default rates expected; E3 video game conf.; Earnings from Best Buy
WEDNESDAY: Weekly mortgage apps; PPI; housing starts; industrial production; weekly oil inventories; Fed's Plosser speaks; Disney insider trader hearing; China trade hearing; Earnings from FedEx
THURSDAY: CPI; weekly jobless claims; current accounts; leading indicators; Philadelphia Fed survey; BP CEO testifies
FRIDAY: Quadruple witching; S&P indexes rebalanced
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