Greek ‘Day Of Reckoning’ Shakes Stock Markets

Fear that Greece could default on its debt and abandon the euro rattled global financial markets Friday.

News that negotiations between Greece and its international lenders are making little progress sent European stock markets down sharply, and the selling spread across the Atlantic. By the close of U.S. trading, stocks across industries were lower, with four of five stocks down. Investors shifted money into German government bonds, a perceived haven in troubled times.

In the U.S., disappointing first-quarter financial results from several big companies fed the selling. After American Express reported revenue that fell short of expectations, investors drove down its stock more than 4 percent.

For all the turmoil in the markets, major U.S. stock indexes closed the day with relatively modest losses. At one point, the Dow Jones industrial average was down 357. The Dow regained some of those losses toward the close of trading, ending down 279.47 to 17,826.30, a drop of 1.5 percent.

That was only the worst drop since March 25. The Dow has struggled since reaching a record high on March 2 and is now back where it started the year.

The Standard & Poor’s 500 index lost 23.81 points, or 1.1 percent, to 2,081.18. The Nasdaq composite fell 75.98 points, or 1.5 percent, to 4,931.81.

In corporate news, Honeywell International fell $2.22, or 2 percent, to $101.70 after reporting disappointing first-quarter results. The industrial conglomerate posted earnings per share that beat estimates, but its revenue fell short.

Advanced Micro Devices plunged 10 percent after reporting a larger loss than investors had expected after the market closed on Thursday. The chipmaker’s stock fell 29 cents to $2.58.

Investors have been bracing themselves for a disappointing earnings season. S&P 500 companies are expected to report earnings per share fell 2.6 percent from last year, according to S&P Capital IQ, a research firm.

Germany’s DAX index dropped 2.6 percent. France’s CAC 40 shed 1.6 percent and Britain’s FTSE 100 fell 0.9 percent. Investors piled into German government debt, which is perceived as being among the safest investments denominated in euros. Yields on Germany’s 10-year government note, which moves opposite to its price, fell to 0.07 percent, a record low, according to Tradeweb.

The price of oil fell nearly 3 percent Friday on a slowdown in the reduction of working drilling rigs, but finished the week sharply higher. Benchmark U.S. crude fell 97 cents to close at $55.74 a barrel in New York. U.S. crude finished up 8 percent for the week, however. Brent crude fell 53 cents to close at $63.45 a barrel in London.

In other futures trading on the NYMEX:

• Wholesale gasoline fell 0.5 cent to close at $1.930 a gallon.
• Heating oil fell 2.6 cents to close at $1.882 a gallon.
• Natural gas rose 0.5 cent to close at $2.634 per 1,000 cubic feet.

The dollar fell slightly to 118.86 yen while the euro rose to $1.0794. Bond prices fell after the U.S. government reported a slight increase in inflation last month. The yield on the 10-year Treasury note fell slightly to 1.87 percent from 1.88 percent Thursday.

Precious and industrial metals futures didn’t move much. Gold rose $5.10 to $1,203.10 an ounce, silver fell 6 cents to $16.23 an ounce and copper was unchanged at $2.77 a pound.

This article appeared in print on page 8 of the April 20th, 2015 edition of Hamodia.