Wall St. lower on China concerns; Greece watched
NEW YORK – U.S. stocks were lower in afternoon trading as concerns of a slowdown in China weighed on commodity prices and investors fretted over aid talks for Greece as it runs out of cash.
The market made up some ground after the S&P 500 index briefly fell below a key technical mark and moved into negative territory for the year.
The Dow Jones Industrial Average is in negative territory for the year, while the Nasdaq fell to a two-month low.
An emergency euro zone summit, which started at 12 p.m. ET in Brussels, will consider a desperate bid by Greek Prime Minister Alexis Tsipras for fresh aid.
German Chancellor Angela Merkel said on arrival there was still no basis for reopening negotiations with Athens and stressed that only days were left to secure a deal.
Adding to the negative tone, sliding Chinese stocks weighed on an already ravaged global commodity sector, with prices of copper, coal, natural gas and iron ore falling toward their 2015 lows.
The Thomson Reuters CoreCommodity CRB index .TRJCRB, which includes 19 commodities, fell 1.33 percent to 214.97, its lowest level in three months.
“Investors are concerned about China because that is a long-term issue. A slowdown in that economy has a much bigger and longer lasting impact,” said Michael Joyce, President of JoycePayne Partners.
At 12:40 p.m. ET the Dow Jones industrial average .DJI was down 87.99 points, or 0.5 percent, at 17,595.59 while the Nasdaq Composite .IXIC was down 50.07 points, or 1 percent, at 4,941.87. The S&P 500 .SPX was down 8.21 points, or 0.4 percent, at 2,060.55, after briefly falling below its 200-day moving average.
Eight of the 10 major S&P 500 sectors were lower. The materials index .SPLRCM index led the declines with a 1.3 percent fall, weighed down by a strong dollar and the slide in commodity prices.
Financials .SPSY were down 1.1 percent as U.S. Treasury yields tumbled. The sector had been on the rise in the past few weeks as prospect of a Fed rate hike boosted banking stocks. JPMorgan (JPM.N), Citigroup (C.N) and Bank of America (BAC.N) were all down between 2 and 3 percent.
The dollar index .DXY was up 0.74 percent at $97, its highest level in a month, a day ahead of the start of the earnings season in the United States.
A stronger dollar reduces income from overseas. Corporate profits are expected to have fallen 3.1 percent in the second quarter, according to Thomson Reuters data.
Advanced Micro Devices (AMD.O) shares slumped 15 percent to $2.10 after the chipmaker cut its quarterly revenue forecast. Its warning of weaker-than-expected PC demand weighed on the broader semiconductor index .SOX, which fell 2.15 percent to its lowest level since February.
Shake Shack (SHAK.N) fell 10.3 percent to $52.92 after a Morgan Stanley rating cut to “underweight”, according to theflyonthewall.com. Tesla (TSLA.O) fell 4.7 percent to $266.59 after a Deutsche Bank downgrade to “hold” from “buy”.
Depomed (DEPO.O) soared as much as 39 percent to a record high of $28.75 after Horizon Pharma (HZNP.O) announced a hostile offer for the drugmaker. Horizon fell 2.5 percent to $33.75.
Declining issues outnumbered advancers on the NYSE by 1,975 to 1,047. On the Nasdaq, 2,113 issues fell and 580 advanced.
The S&P 500 index showed six new 52-week highs and 48 new lows, while the Nasdaq recorded 30 new highs and 154 new lows. – REUTERS