“A Greek exit is priced in if we get action between now and the Greek election time by the ECB and IMF to do something to ring-fence the contagion and [bank] deposit flight that’s going to happen in the southern European banks," said Art Hogan, managing director at Lazard Capital Markets.
Facebook gained for a second day, but still traded far below its IPO price of $38 a share. Meanwhile, demand to borrow Facebook's sharesfor shorting has increased, with nearly 8 percent of the stock out on loan, according to Data Explorers.
After the close Wednesday, Knight Capital announced it suffered a pre-tax loss of $30 million to $30 million due to problems during Facebook's debut and demanded compensation from the Nasdaq . And Fidelity Investments said it is dealing with "thousands" of customers with order problems.
Adding to woes, Facebook said it may be open to changing its listing from the Nasdaq to rival NYSE , following the botched trading debut, according to sources. Meanwhile, sources told CNBC that Nasdaq executives are making an aggressive, behind-the-scenes push to stem the damage.
Among earnings, Hewlett-Packard closed higher after the Dow component beat on earnings and announced plans to lay off 27,000 employees, or 8 percent of its workforce. Its third-quarter outlook fell short of expectations but its full-year topped the consensus. In addition, at least three brokerages raise their price target on the firm.
NetApp plunged after the computer storage and data management company's guidance disappointed and the CEO warned of uncertainty in Europe. At least eight brokerages cut their price target on the firm.
Costco rose after the warehouse club operator posted better-than-expected earnings.
Tiffany slumped after the upscale jewelry retailer lowered its guidance, hurt by slowing global economic growth. At least three brokerages cut their price target on the company.
On the economic front, weekly jobless claims edged down a mere 2,000to a seasonally adjusted 370,000, according to the Labor Department. The four-week moving average for new claims dropped 5,500 to 370,000.
Meanwhile, durable goods orders rose less than expectedin April, gaining just 0.2 percent, according to the Commerce Department. And U.S. manufacturing growth slowed in May to hit a three-month low, according to a new industry survey from Markit.
Treasury prices held their lossesafter the government auctioned $29 billion in 7-year notes at a high yield of 1.203 percent and bid-to-cover of 2.80.
—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
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