(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.