US stocks skid sharply lower after early rise

NEW YORK: US stocks closed sharply lower after an early rise Wednesday as worries persisted over whether the eurozone would come up with an effective approach to containing the Greek crisis.

The Dow Jones Industrial Average closed down 179.79 points (1.61 percent) to 11,010.90.

The broader S&P 500 gave up 24.32 points (2.07 percent) to 1,151.06, while the Nasdaq Composite lost 55.25 points (2.17 percent) to 2,491.58.

The tumble came after three days of gains that had largely ignored signs of discord in Europe over how to move ahead on the regional crisis as well as a series of poor US economic data.

"The market remains sensitive to signs of discord in Europe over measures to contain the debt crisis," said Sameer Samana at Wells Fargo Advisors, pointing to debate over whether a planned 20 percent private-sector writedown of Greek debt should be increased to 50 percent or more.

"Key votes take place tomorrow and Friday in Germany to expand the role of the European bank bailout fund," Samana said.

"Signs of progress on the eurozone debt crisis prompted healthy gains on Monday and Tuesday, but traders opted to take some profits off the table ahead of a German vote regarding the proposed expansion of the European Financial Stability Facility," said Elizabeth Harrow at Schaeffer's Investment Research.

Germany's parliament will weigh Thursday the July 21 rescue package agreed by European Union leaders which includes a new Greek bailout and an expansion of the eurozone rescue fund.

All 30 Dow blue chips fell, with Bank of America taking a 4.9 percent hit after a New York Times report said it is facing a $50 billion shareholder lawsuit related to its takeover of Merrill Lynch.

Shares of industrial power 3M lost 3.5 percent.

Shares of online retail giant Amazon were up 2.5 percent as the company unveiled $199 tablet computer, aimed at competing with Apple's successful iPad.

Apple shares dropped 0.6 percent.

The bond market rose slightly. The 10-year Treasury bond yield was at 2.00 percent compared to 2.00 percent late Tuesday, while the 30-year yield fell to 3.09 percent from 3.12 percent.

Bond prices and yields move in opposite directions.

Copyright AFP (Agence France-Presse), 2011