Stocks plummet over fear of Greek default
NEW YORK (AP) — Stocks fell Monday on worries that Greece could be edging closer to defaulting on its debt. The yield on the 10-year Treasury note reached another record low as investors piled into U.S. government debt.
The Dow Jones industrial average fell 100 points, or 0.9 percent, to 10,891 at 12:15 p.m. It had been down as many as 135 points shortly after the opening bell. Caterpillar Inc. led the Dow lower, falling 2.5 percent to $81.
The Standard & Poor's 500 index fell 9, or 0.8 percent, to 1,145.
Technology stocks fared better than the overall market following news of a semiconductor deal. The Nasdaq fell less than point to 2,462.
Investors fear that Greece could default on its debts. They're also concerned that rating agencies may cut the credit ratings of French banks because of their holdings of Greek bonds. A downgrade could bring more instability to Europe's beleaguered financial system.
"All these things together are getting me concerned," said Douglas Cote, chief market strategist for ING Investment Management. "With Europe's banks under so much duress and Greece near an imminent default, you can't tell me the U.S. is insulated from their problems. I don't buy it."
The resignation of a key European Central Bank official Friday combined with worries over a new recession in the United States led to a large stock market sell-off. The Dow Jones industrial average and Standard & Poor's 500 index have fallen for six of the past seven weeks.
A default by Greece or one of the continent's other heavily indebted governments could ripple through the global markets and make it more difficult for other European countries to borrow money. Economists worry that Europe's financial crisis could tip a weakening U.S. economy into another recession.
Worries over Europe's debt crisis drove traders into Treasurys, pushing the yield on the 10-year Treasury note to 1.87 percent, the lowest since the Federal Reserve Bank of St. Louis began keeping daily records in 1962. During the financial crisis in late 2008, the 10-year yield hit a low of 2.05 percent.
McGraw-Hill Cos. rose 1.5 percent to $39. The company said it will split into two public companies, with one unit focused on education services and the other centered on markets, including the rating agency Standard & Poor's and J.D. Power and Associates.
NetLogic Microsystems Inc. jumped 50 percent to $48 after Broadcom Corp. said it has agreed to acquire the maker of semiconductors for $3.7 billion. Bank of America Corp. rose 1 percent after its CEO, Brian Moynihan, announced new cost-cutting goals.
Wynn Resorts rose 2 percent to $151 after a unit of the casino operator said it had a signed a deal to build a resort in Macau. Casinos have been expanding their operations in the former Portuguese colony, considered the world's most lucrative gambling market.