Stocks recovered some lost ground in afternoon trading, but ended the day with big losses as investors fretted over signs of political instability in Greece.
The Dow Jones industrial average closed at 12,932.09, down 76.44 points or 0.6 per cent, after recovering about 120 points from its earlier low. The broader S&P 500 closed at 1363.72, down 5.86 points or 0.4 per cent, after dipping below 1348 at its low point. In Canada, the S&P/TSX composite index closed at 11,704.74, down 155.92 points or 1.3 per cent. Earlier, the Canadian benchmark index had been down as much as 250 points.
The declines followed more uncertainty in Greece. After weekend elections, political parties have been unable to form a coalition government, raising the prospect of another election. While the country's role in the European sovereign-debt crisis had gone quiet in recent weeks, with attention turning to Spain, the political instability raises the same old concerns: Whether Greece can implement the necessary budget cuts to receive bailout funds and keep it within the euro zone.
Among big movers within the Dow, Bank of America Corp. fell 2.1 per cent. The shares have fallen 22 per cent over the past month. Microsoft Corp. fell 0.5 per cent and McDonald's Corp. fell 2.1 per cent after its April sales grew just 3.3 per cent, well below the company's forecast for 4 per cent growth.
Canada's benchmark index was weighed down by commodity producers after commodities continued to slide. Crude oil fell for a fifth straight day, reflecting global economic concerns: It closed in New York at $95.80 (U.S.) a barrel, down $2.14. Gold failed to act as a haven investment, falling to $1,604.50 an ounce, down $34.60.
Among commodity producers, Suncor Energy Inc. fell 1.5 per cent and Barrick Gold Corp. fell 2.6 per cent.