(Bloomberg News) The Dow Jones Industrial Average dropped for a sixth straight day, the longest losing streak since August, as Greece's political impasse intensified concern about a worsening of the European sovereign-debt crisis.

Industrial, financial and commodity shares had the biggest declines in the Standard & Poor's 500 Index among 10 groups. General Electric Co., JPMorgan Chase & Co. and Alcoa Inc. retreated at least 1.5 percent to pace losses among the biggest companies. Macy's Inc. slumped 3.6 percent after the owner of its namesake and Bloomingdale's department stores kept its forecast for profit this year lower than analysts' projections.

The S&P 500 fell 1.3 percent to 1,345.88 at 10:36 a.m. New York time, a two-month low on a closing basis. The Dow slid 155.76 points, or 1.2 percent, to 12,776.33. It was poised for the longest slump since Aug. 2, three days before S&P stripped the U.S. of its AAA credit rating. Trading in S&P 500 companies was 5.6 percent above the 30-day average at this time of day.

"Everything is not fine with Europe, it never was and that's the problem," said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird, which oversees $85 billion. "It looks like Greece is going to have to leave the euro zone sooner rather than later. The markets will probably remain on edge over the next several weeks."

Stocks slumped and Spanish default risk climbed to a record as Alexis Tsipras of Greece's Syriza party squared off with political leaders before talks on forming a coalition, handing them an ultimatum to renounce support for the European Union-led rescue if they want to enter government. Greece, which has 436 million euros ($566 million) of debt coming due on May 15, is struggling to form a government after weekend elections.

GE, Alcoa

Concern about the European debt crisis helped drive the S&P 500 down 3.7 percent in May. All 10 groups in the S&P 500 retreated today. The Morgan Stanley Cyclical Index of companies most-dependent on economic growth tumbled 1.7 percent. GE decreased 2.2 percent to $18.82. Alcoa lost 1.5 percent to $9.07.

American financial companies retreated as a measure of European lenders slumped 2.9 percent. The KBW Bank Index dropped 2.2 percent as all of its 24 stocks declined. JPMorgan sank 2.7 percent to $40.25. Citigroup Inc. decreased 3.1 percent to $30.36.

Moody's Investors Service will this month start cutting the credit ratings of more than 100 banks, a move that risks pushing up their funding costs and forcing them to curb lending in a threat to economic growth.

BNP Paribas SA, France's biggest lender, Deutsche Bank AG, Germany's largest, and New York-based Morgan Stanley are among firms that face having their short- and long-term debt downgraded to their lowest-ever levels by Moody's, the ratings company said in February.

Macy's Forecast

Macy's slumped 3.6 percent to $38.08. The company repeated its forecast that profit this year would be $3.25 to $3.30 a share. Analysts estimated $3.39, on average.

Some stocks slumped after analysts' downgrades. Marvell Technology Group Ltd. dropped 4.1 percent to $13.33 after being cut to neutral from buy at UBS AG. CF Industries Holdings Ltd., the largest U.S. maker of nitrogen fertilizers, tumbled 4.6 percent to $174.48 after Dahlman Rose & Co. recommended selling the shares.

Walt Disney Co. jumped 1.6 percent to $45, a record high. The world's largest entertainment company said fiscal second- quarter earnings rose 21 percent, beating analysts' estimates on rising theme-park and cable-television profits.

Dean Foods Co. rose 6.5 percent, the most in the S&P 500, to $13.55. The biggest U.S. dairy processor boosted its full- year forecast, saying it now expects to earn at least $1.10 a share. Analysts, on average, estimated 95 cents.

Beat the Market

Arena Pharmaceuticals Inc. increased 4.4 percent to $3.57. The biopharmaceutical company was raised to outperform from market perform at BMO Capital Markets. The rating means that Arena is forecast to beat the market.

The S&P 500 has risen 6.9 percent this year amid better- than-estimated economic and corporate data. About 70 percent of S&P 500 companies that reported results since the start of the earnings season have topped projections, according to data compiled by Bloomberg.

U.S. stocks are less than expensive regardless of the price-earnings ratio used to value them, said Richard Bernstein, chief executive officer of Richard Bernstein Advisors LLC.

A comparison of the S&P 500's multiple to earnings from the previous four quarters along with a ratio, compiled by Yale University Professor Robert J. Shiller, that's based on 10 years of income, put the index's value at respectively 13.8 times and 22.2 times profit.

'Reasonably Valued'

"The market looks at worst reasonably valued, at best downright cheap," Bernstein said in an interview with Robert Huebscher, founder and CEO of the Advisor Perspectives website, that was published yesterday.

Both price-earnings indicators look "better than normal" after taking interest rates into account, he said. The average yield on 10-year Treasury notes has fallen to 2.01 percent this year from 2.76 percent for all of last year, according to data compiled by Bloomberg.

P/E ratios are poised to rise, he said during the April 30 interview, as economic weakness in Europe and slower growth in emerging markets spur demand for U.S. assets.

"People are underestimating the risk outside the U.S. and overestimating the risk inside it," said Bernstein, based in New York. "Over the next several years, there is going to be a reevaluation of those risks, and we should get higher multiples in the U.S."