Stocks Recover, but Dow Logs 5-Day Decline
Stocks recovered more than half their losses, but still closed in negative territory Tuesday as political uncertainty in Greece kept investors on edge.
The Dow Jones Industrial Average recovered from a 198-point plunge but still logged a five-day losing streak, slumping 76.44 points, or 0.59 percent, to close at 12,932.09. BofA and Hewlett-Packard led the blue-chip laggards.
The S&P 500 erased 5.86 points, or 0.43 percent, to finish at 1,363.72. The Nasdaq slid 11.49 points, or 0.39 percent, to end at 2,946.27. Both indexes hit two-month lows earlier in the session.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, ended above 19.
Most key S&P sectors closed in the red, led by consumer discretionary and financials, while defensive sectors health care andutilities eked out small gains.
“My attitude about equities right now has moved from being moderately bearish to moderately apocalyptic,” said Tres Knippa of Kenai Capital Management on CNBC's "Squawk on the Street." “What is going on in Europe is an absolute disaster…the risk-on trade is not the place to be. I want to be out of equities and very, very defensive because the situation in Europe just got worse after those elections.”
Worries about Greecekept investors on edge after the mainstream conservatives failed to form a coalition government in the wake of Sunday’s elections. Analysts remained skeptical, pointing to the possibility of another election as early as June. Greece's ASE composite index closed at its lowest level in nearly 20 years. (Read More: Euro Zone Is 'Slowly Crumbling')
“These people are not going to compromise—there’s no way out of it either,” said Carol Pepper, CEO of Pepper International. “The focus will continue to flicker on and off Europe—when things are good in the U.S., concerns in Europe will go into background focus, but on days like these where we don’t have much economic news, Europe will flash to the forefront.”
France’s new president, Francois Hollande, is scheduled to meet German Chancellor Angela Merkel to discuss how to tackle the economic crisis in Europe.
However, dividing lines were already being drawn after Hollande criticized Germany's heavy emphasis on austerity to tackle the sovereign debt crisis and called for policies to revive economic growth. But Merkel remained adamant, saying the fiscal agreement was not up for renegotiation.
Oil prices dipped for a fifth-consecutive sessionto settle near $97 a barrel, while gold briefly broke below $1,600 an ounce.
McDonald's disappointed with a report that same-store saleswere lower than market expectations in April. Fellow fast-food chain Wendy's dipped after the firm posted earnings that missed expectations, due to higher beef costs.
Discovery Communications declined after the firm reported lower-than-expected earnings, hurt by losses at the Oprah Winfrey Network. And DirecTV eked out a small gain after the satellite TV provider said profit and sales rose.
Dow component Disney is scheduled to post earnings after the closing bell.
Fossil plunged to lead the S&P 500 laggards after the fashion accessories maker
HSBC beat expectationswith an underlying profit of almost $7 billion in the first quarter thanks to a rebound in investment banking income and a fall in U.S. bad debts. Meanwhile, First Bank posted a narrower quarterly loss on a lower provision for loan and lease losses.
Wynn Resorts posted quarterly results that missed estimates after robust growth in Macau failed to make up for lagging Las Vegas revenue.
Treasury price held their gainsafter the government auctioned $32 billion in 3-year notes at a high yield of 0.362 percent and a bid-to-cover of 3.65.
—Follow JeeYeon Park on Twitter: @JeeYeonParkCNBC—
Coming Up This Week:
WEDNESDAY: Weekly mortgage apps, wholesale trade, oil inventories, 10-yr note auction, BofA shareholders mtg, Fed's Kocherlakota speaks, Fed's Pianalto speaks, Fed's Plosser speaks; Earnings from Toyota, AOL, Dean Foods, Macy's, Cisco, Activision Blizzard, NewsCorp, Priceline.com
THURSDAY: International trade, jobless claims, import & export prices, 30-yr bond auction, Ford shareholders mtg, Fed Chairman Bernanke speaks, Fed's Evans speaks, Fed's Kocherlakota speaks; Earnings from ArcelorMittal, Kohl's, Sony, Nordstrom
FRIDAY: Producer price index, consumer sentiment; Earnings from Nissan, Nvidia
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