After a couple of calm days for North American stocks, the weight of Greece once again drove major indexes down on Wednesday – resuming a lengthy losing streak.
In midday trading, the Dow Jones industrial average was down 159 points or 1.3 per cent, to 12,344. The broader S&P 500 was down 16 points or 1.2 per cent, to 1300. In Canada, the S&P/TSX composite index was down 152 points or 1.3 per cent, or 11,299.
The slump follows rising concerns that Greece is contemplating an exit from the euro zone, raising all sorts of uncertainty about what the move would do to its economy and the euro zone. On Tuesday, Greece’s former prime minister said that the risk of a Greek departure is real, skewering European indexes on Wednesday: Germany’s DAX index fell 2.3 per cent.
The stock market slide overshadowed relatively upbeat U.S. economic news: New home sales rose 3.3 per cent in April, which was slightly ahead of expectations and supports the upbeat view that the housing market is showing some encouraging signs of improvement.
The stock market slide was broad, hitting 29 of the 30 stocks in the blue-chip Dow and all 10 subindexes in the S&P 500 and the S&P/TSX composite index. Within the S&P 500, energy stocks fell 1.7 per cent, while information technology stocks, materials and financials fell 1.5 per cent each. Within the TSX, energy stocks were among the biggest laggards, falling 1.9 per cent. Utilities fell 1.6 per cent, materials fell 1.4 per cent and financials fell 1.2 per cent.
Dell Inc. fell 17.6 per cent after the computer maker reported a 33 per cent drop in its quarterly earnings, along with lower revenue and lower gross margins.
However, Facebook Inc. rose 4 per cent, putting it on track for its first gain since merely nudging higher on its first day of trading on Friday. The shares had slid as much as 18 per cent below the IPO price of $38.
Commodities were weak. Gold fell to $1,539.40 (U.S.) an ounce, down $37.20 and putting it awfully close to marking a bear market decline from its record high of about $1,900 an ounce in September. Crude oil fell to $90.43 a barrel, down $1.42.
Among Canadian commodity producers, Suncor Energy Inc. fell 2.4 per cent but Barrick Gold Corp. rose 0.4 per cent.
Meanwhile, Bank of Montreal was down 0.1 per cent after reporting a 27 per cent gain in its fiscal second quarter earnings, topping analysts’ estimates.